Millennials familiar with YCharts are more likely than not to be financial do-it-yourselfers, according to a survey published by the company. Only 11 percent of millennials surveyed have an advisor-directed brokerage account and most would rather go it alone than work with an advisor.
The survey participants who don’t use advisors aren’t likely to use one in the future, either. Just 30 percent of millennials, who don’t use an advisor now, say they’ll try to find one in the future. Meanwhile, 31 percent of participants already use investing apps or automated advice platforms.
While limited in scope, the survey indicates advisors have a “limited opportunity to demonstrate their value proposition,” said Sean Brown, CEO of the financial data platform. The survey polled 600 participants who were familiar with YCharts.
YCharts had some suggestions for advisors interested in bringing on more millennial clients. Advisors should be prepared to collaborate with millennials on investing decisions and goals, rather than prescribing portfolios. “Millennials either aren’t aware of the value of a financial advisor or they simply don’t think traditional wealth management is worth it,” according to the study.
With high savings rates (53 percent save more than 12 percent of their pre-tax income) and expectations building of a wealth transfer from the older generation, advisors will eventually need to understand the traits of these potential clients.
Accessibility and staying up-to-date on new technologies is important for advisors interested in bringing on the next generation of investors. “Communicating on their preferred channels can be more successful than quarterly lunches and research binders,” the study suggests. “Technology enables quick, effective touchpoints that can lead to stronger relationships over time.”
While advisors may find it hard to convince this “self-sufficient” group of their value, it’s a job worth taking on. “Millennials are in need of a wake-up call,” the survey concluded.
Expectations are one place to start: One-third of survey participants aged 22 to 29 hope to have $1 million in assets by aged 35, while just 24 percent of survey participants report currently having over $100,000 in savings and investments.
