High Net Worth (HNW) millennials* are the next shiny thing. They’ve grown up in a very different world to that of their predecessors and come with an array of fascinating traits, needs and expectations. Financial services firms are now in full pursuit, drawing up game plans on how they’re going to engage this precious segment. Unfortunately, too many fail to recognize assumptions and stereotypical views about this young and promising customer, that can frankly be detrimental to future ROI and success.
Here are 3 myths typically held by financial services leaders on HNW millennials today.
Myth 1: They Only Have Eyes For Tech
HNW millennials grew up during a time when technology exploded; the internet and social media quickly became commodities and integral enablers in their lives. Information was more accessible and the notion of self-service for this generation went from option to first choice.
Granted, this customer segment displays a bigger appetite to use technologies such as mobile apps, social media and chatbots than older client generations (Figure 1).
But, they don’t want a digital-only experience. They enjoy a mix of people and technology (Figure 2).
In fact, most HNW millennials like to start their journey on digital channels and then validate the information they’ve found with the help of advisors (Figure 3).
Financial services firms must use these advisor-client engagements as an opportunity for empowerment. Progressive advisors understand that that can be achieved by helping young clients make sense of information and options; empowering them to come to their own conclusions.
Myth 2: ‘Phone Phobia’ & Conversation Averse
Today’s millennials would rather sing on national television than converse over the phone. Financial services leaders are now asking: are HNW millennials actually going to want to talk to us? And regularly enough, for us to educate, enable and reassure them about protecting and growing their wealth in the future?
This, however, is not the case. HNW millennials actually want a smorgasbord of options! One third of HNW millennials want the best of both worlds; an equal mix of people and digital interactions.
In addition to helping HNW millennials feel empowered, financial services firms must meet this client with an armful of compassion during live and phone interactions. HNW millennials are eager to learn but the advisor-client age gap that persists in many organizations can push millennials away with potential intimidation and uncertainty. Empathetic and empowering experiences can bridge that gap and keep HNW millennials indulged in conversation.
Myth 3: Blindsided Crypto-Currency Believers
Many financial services leaders believe HNW millennials to be more enthusiastic about digital currencies and assets than other generations. They make bold investments in the crypto-currency domain and this makes them come across as carefree, reckless and less concerned about planning and investing for the long term.
Interestingly enough, HNW millennials are actually more likely to be worried about money than generations before them. Gartner research finds that both mass affluent and HNW millennials experienced greater psychological effects from the financial crisis than Gen X and Baby Boomer clients (Figure 4).
Financial services firms must acknowledge that HNW millennials are more prudent, contrary to common belief and must guide them to make the right decisions for the future.
* HNW millennials – individuals born between 1981-1996, aged 25-40 today.