A large portion of the millennial population is affluent, and financial professionals who fail to court these high net worth youth may find it difficult to grow their businesses in the future.
While the majority of high net worth individuals are older, the number of high net worth millennials has expanded rapidly, and the generation is poised to become one of the wealthiest in history. These individuals represent an opportunity for financial professionals today, and serving their needs early should build a client base that lasts through the next few decades as more millennials build their wealth.
The size of the market
A new LinkedIn survey that aimed to quantify the number of affluent millennials in the U.S. found 15.5 million millennials had more than $100,000 in investable assets. These individuals are already high net worth, but their personal wealth is set to grow immensely in the next few years. According to LinkedIn’s data, this group will receive $59 trillion in personal wealth transfers in addition to whatever money they earn personally.
This group will be hugely important to people throughout the economic spectrum, as they will define spending trends and will be the investors of tomorrow. That’s particularly interesting because this group does not mirror the current demographic makeup of high net worth individuals. According to information gathered by research firm Futurecast, affluent millennials are predominantly female and put a high value on quality and service when making spending decisions.
Financial professionals need to harness this market early, because Futurecast also noted that affluent millennials are trendsetters. By building a millennial client base early, financial professionals should be able to drive more traffic to their business via word-of-mouth in the years to come.
How financial professionals can connect
The affluent millennials group is highly ambitious, and financial professionals should tap into that ambition to earn new clients. LinkedIn found affluent millennials are three times more likely than members of Generation X to want to create a business, for instance. These large-scale ambitions will require smart financial planning, and that provides an opportunity for financial professionals. By speaking openly about a millennial client’s goals and the proper financial planning options to achieve those goals, financial professionals can establish themselves as trusted advisors and build a lasting relationship with affluent millennial clients.
It’s crucial for financial professionals to establish their services as a valuable addition to millennials’ financial lives. In the LinkedIn study, the majority of high net worth millennials see a financial advisor as something that is nice to have, but not a necessity. By altering that perception, financial professionals can draw in millennials and help them financially plan in the years to come.
An opportunity to review exiting plans
Because affluent millennials are relatively independent, they may have a financial plan in place when they first engage a financial professional. Chances are that this plan will not adequately provide for the millennial consumer’s goals. Early meetings with a millennial consumer should focus on a policy review that evaluates the individual’s outstanding financial plan, insurance policies and investments against their goals for the future.
Financial professionals can use this time to build a relationship with the client, and should be able to demonstrate their financial expertise. Once an affluent millennial sees the value provided by a financial professional’s guidance, they are more likely to prioritize their relationship with the professional into the future. LinkedIn found that millennials who work with financial professionals are very loyal, and financial professionals can harness that loyalty for lasting returns.