CUNA Mutual Group: Ways to reach and advise millennials
Despite the progressive traits ascribed to millennials and the broad presumption that they are comfortable with taking risks, a recent Deloitte survey reflects that this generation is seeking stability in an uncertain world. It’s a paradox that’s evidencing itself in how millennials are approaching investing and saving for retirement.
Millennials and Market Skepticism
In U.S. Retail Investor Products and Platforms 2017: Retooling for the Modern Investor, Cerulli Associates reports that 80 percent of investors younger than 40 prefer portfolio protection and actively avoid market risk, willingly accepting underperformance in the market to guard against potential major losses. Given the 2008 financial crisis and market collapse and the bursting of the Internet stock bubble eight years earlier, the fear of risk is warranted in millennials’ minds — causing them to hang onto their cash instead of entertaining even a conservative investment strategy to prepare for retirement.
How do advisors speak to a generation of people not necessarily open to hearing the benefits of leveraging a bull market?
Like any other clients, reaching millennials starts with earning their trust. Interestingly, despite being comfortable with the notion of robo-advisors, the majority of this generation finds security in talking face-to-face with an advisor about their goals and their future.
Given their age, saving for retirement may not be a top of mind investment motivation for millennials, so don’t jump into the deep end during initial conversations. Instead, help them better understand themselves and their attitudes toward money. For example, ask questions that reveal their fears about advisors, investing, and retirement. Their answers may be illuminating for both of you in terms of tolerances. It also helps you align products and strategies with their mindsets, such as risk control annuities for those who harbor fears about market volatility.