Wealth Management and the Millennial Shift

Within the next 5-10 years, Millennials are expected to inherit more than $30 trillion dollars across the board. Once they are in control of a substantial amount of money, they are going to want to invest, but not necessarily the same way their parents did. There will be a shift within the wealth management industry and advisors need to start preparing now.

Impact Investing

A recent survey distributed by The Brookings Institution found that, “84 percent of millennials consider a company’s involvement in social causes when making purchasing decisions.” This finding lends itself to investments as well. Millennials will begin to look into impact investing instead of more traditional investment routes. Wealth managers are going to start seeing a change in investments that align with their clients values.

Skepticism of Wealth Advisors

Wealth advisors will also begin to see a shift in loyalty. Millennials will not necessarily remain with the same wealth advisor as their parents. The reason behind this is due to a general distrust for wealth advisors. Ultimately, it will be wise for wealth managers to explain that they are not the salesman in the sense that Millennials think they are. A good practice is to remain completely transparent in regards to the way the process works.

Wealth managers may need to explain their position and how they only receive commission or bonuses off of overall portfolio growth and not per investment. Gaining a Millennials trust and becoming more of a partner than an advisor will serve the wealth management well as a whole.

Tech Advancements

Technology has always been, and will continue to be, a huge part of the millennial generation. Being the first generation to completely grow up with tech, it has become an integral part of their everyday lives. Millennials are going to start looking for wealth management firms who are able to provide them with online resources and apps to check on their investments. Many firms currently are dragging behind in terms of tech and this may very well become a problem sooner than later.

Reliable apps and websites take time and money to implement. Wealth management companies need to start looking past the horizon to begin developing products and services that will soon be expected of them.