A recent Financial Communications Society event in Boston — “Millennial Investing and Financial Wealth” — dispelled some common myths surrounding this headline-grabbing generation’s relationship with money. And it sought to promote a deeper understanding of 23-to-38-year-olds, who now represent the largest group of workers, consumers, home buyers, and savers in the U.S. economy.
Held at the Omni Parker House Hotel in Boston on Nov. 12, 2019, the luncheon included new research findings on Millennials’ attitudes toward investing, presented by Joetta Gobell, Vice President, Research and Insights, at Dotdash. That was followed by a panel discussion, moderated by BackBay Vice President Paul Lim, featuring Jenine Garrelick of MFS Investment Management, Misty Lynch, CFP®, of John Hancock, Alexandra Nawoichik of Putnam Investments, and Eric Roberge, CFP®, founder of Beyond Your Hammock.
Some key takeaways from the event:
- Despite being younger and having more time to ride out bumps in the market, Milliennials are less likely to own stocks than Gen Xers, the Dotdash study found. This is attributable, in part, to the fact that Millennials came of age — and began entering the workforce and financial markets — in the wake of the global financial crisis.
- Millennials understand that they need to invest more for retirement, but they feel overwhelmed and are fearful of the risks involved.
- Despite the appeal of Robo Advisors, Millennials are even more likely than Gen Xers to trust the guidance provided by human financial advisors. And affluent Millennials with financial advisors are twice as likely to report better financial performance, according to the Dotdash study.
- Financial advisors who understand the particular challenges and needs of Millennials can help them navigate their financial lives, but they must first understand how to effectively communicate with younger investors.
- Panelists noted that younger investors seek greater and quicker avenues of personalized communications and are comfortable having those discussions by text, email, or video conference.
- Panelists also reported that the shift to greater online engagement works both ways. For more routine tasks, for example, there is now an increased responsibility for advisors to be responsive to emails, sharing timely content on social media, and digitizing more regular forms of simple communications.
- Millennials want to be active participants in shaping their financial paths. Panelists observed that simply warning younger investors that they must invest more isn’t a persuasive approach. A more-useful strategy is to illustrate how Millennials can improve their long-term financial path by manipulating key financial levers — for instance by saving more, saving more effectively, and investing more aggressively.
- In the Dotdash study, Millennials reported that greater personal finance knowledge increased the likelihood of engagement, which strongly suggests a virtuous cycle where financial education leads to comfort which leads to engagement and sound financial decision-making.
The conclusion of the panel was that financial firms that seek to work with this economically important demographic must be willing to adapt to the communication style and financial needs specific to this generation. The panelists noted, for instance, that an effective way to attract younger investors is to share information and real-life anecdotes that Millennials can relate to. This is why content marketing, if done in a personalized manner, can be a particularly effective tool to build credibility with — and the loyalty of — this influential generation.