Family Office

Engaging Millennial Clients: Five Themes And Some Misconceptions Uncovered - FOX Research

Eliane Chavagnon, Editor - Family Wealth Report, February 23, 2015


The issue of how to serve wealthy Millennials is high on the wealth management industry's agenda, as advisors consider the unique preferences of – and how to capture business from – this investor segment.

One big area of focus has been around client acquisition and retention as there exists what has been described by Family Office Exchange as a misconception that many Millennial family clients plan to let go of their parents’ advisors as soon as they get the chance.

However, according to a new white paper by FOX, Millennial – or Gen Y – clients are actually “eager” to work with experienced advisors who already know their family.

“If you can establish relationships early with your young adult clients, demonstrate value by helping them to achieve their goals, and if you can manage to give them the client experience they want, you’ll see those numbers flipped in your favor for client retention,” FOX’s Amy Hart Clyne, executive director, Knowledge Center, told Family Wealth Report.

“On the other hand, there are major players who think that it should be business as usual with Millennials,” Clyne said. “They think that this generation isn’t all that different than the ones that came before them. Our research shows that while their essential needs are not all that different, Millennials’ expectations for service delivery are different in some subtle but very important ways. So, it’s not the ‘what,’ it’s the ‘how’ that’s different. That’s what the recommendations in our report address.”

For its Engaging the Client of the Future paper, FOX interviewed 30 Millennial family clients, 13 industry experts and spoke with members of the FOX Thought Leaders Council and the FOX MFO Council. The organization has analyzed five generational themes to help advisors develop a deeper understanding of the needs of their Millennial family clients, as well as the factors shaping these.

First, advisors must appreciate the way that Millennials value relationships. As a 24-year-old male interviewee put it (as summarized in the report): “When you’re accustomed to turning to close relatives for financial advice and education, relying on outside advice can be very uncomfortable.”

Being able to connect with clients on a more personal level by serving as a coach or mentor, for example, is therefore paramount, FOX said. Additionally, because Millennials tend to be “natural networkers,” providing them with thoughtful networking opportunities will likely be well received.

Meanwhile, Clyne noted that some advisors expressed concern, understandably, that young adult clients wouldn’t be very open to working with older individuals. However, it emerged that Millennials don't regard age as a barrier to relationship-building, although they do worry about the prospect of their advisors retiring.

“These advisors feared they’d have a hard time connecting on a personal level due to a generation gap,” Clyne said. “The Millennials in our study told us that age is not an issue. They value the expertise and they value long-term relationships where the advisor knows the family history and understands the dynamics and complexities...Forming multi-generational teams helps advisors connect with younger clients, fosters opportunities for internal knowledge sharing and training, and helps with succession.”

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