HOW TO ATTRACT

the Next Generation of

INVESTORS

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 Millennials are expected to inherit
$18 trillion in wealth
from their parents.

This transfer of wealth will be the largest in history. Acquiring the millennial generation
as clients represents one of the largest opportunities for financial advisors to grow their
practice today. In order to do so, it will be important for financial advisors to better
understand millennial values and behaviors and how to adapt their practice to gain the
trust and loyalty of millennials.

We designed this eBook to help advisors better realize the importance of understanding
the values of individuals and how each generation’s worldview is shaped. Our strategic
partner, think2perform, conducted thorough research with a financial services Fortune
500 company to identify common misconceptions about millennials and unlock the
unstated opportunity of those misperceptions. This research will help advisors develop
more compelling value propositions for prospective millennial clients and the millennial
children of current clients.

We hope you find this resource helpful as you develop your strategy for future growth.

Best,

The Kaplan Financial Education Team

MKT-003225

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 mil·len·nial
/mi lenē l/
e
noun
1. a person reaching young adulthood in the early 21st century.
“the industry brims with theories on what makes millennials tick”

Millennials Defined
Researchers sometimes disagree on what individuals fall into the millennial generation, so we want to clarify how we are defining
millennials in this eBook. We identify millennials as individuals who were born between the years of 1982 and 1995. The generation
was named for the young adults that would be graduating high school in the new millennium, and currently makes up 25% of the
US population. Millennials are sometimes referred to as Generation Y, but for the purposes of this eBook we will only use the term
millennials to avoid any confusion.

A Comparison of Baby Boomers and Millennials

When you put baby boomers and millennials side-by-side, you can see many surprising similarities between the two generations.
Both comprise about ¼ of the US population and have been shaped tremendously by major cultural events. Industry shifted when
soldiers returned from World War II for the baby boomers, while technology revolutionized the workplace for millennials. Both
generations were also rocked by violence with the JFK assassination for baby boomers, and 9/11 and the first major mass shooting at
Columbine for millennials. In addition, millennials have grown up in an age with two major stock market crashes.

These major events have helped to shape the values and worldview of both baby boomers and millennials. In the next sections, we
will outline misconceptions about millennials, as well as how the cultural events each generation grew up with helped to shape some
of the overlapping values of both generations.

Soliders Return from WWII First PC launched and beginning of technological revolution
Civil Rights Movement Massive violence: 9/11, Columbine
JFK Assassination 2 stock market crashes

Baby Boomers Millennials

Born: 1946–1964 Born: 1982–1995
Size 79M 80M

% population 23% 25%

2013 Annual buying power $2.3 Trillion $200 Billion

2025E Annual buying power ~$1.3 Trillion ~$2 Trillion

4% unemployment 10% unemployment

Economic Trends
4.4% Real GDP Growth 1% Real GDP Growth

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 myth vs fact
myth vs fact
Misconceptions about Millennials and the Unstated Opportunity
Misconceptions about Millennials and the Unstated Opportunity
There are many unflattering perceptions of millennials today. Many outsiders perceive them as broke, dependent, lazy, and
financially illiterate.
There are many However,perceptions
unflattering these perceptions miss much
of millennials ofMany
today. the story and opportunities
outsiders perceive themforas
financial advisors. Bylazy,
broke, dependent, unpacking
and
these common misconceptions, advisors can better identify the opportunities to appeal to prospective millennial clients.
financially illiterate. However, these perceptions miss much of the story and opportunities for financial advisors. By unpacking
these common misconceptions, advisors can better identify the opportunities to appeal to prospective millennial clients.

myth: Millennials are Broke myth: Millennials are Financially Illiterate

fact: Perceiving millennials as broke is an oversimplification
of the story. They started college at a time of great recession
with tuition prices surging simultaneously. They found higher
education to be a better option than unemployment and,
therefore, took on large student loans to pay the hefty cost of
higher education. This has resulted in millennials being the most
educated generation ever! Financial advisors should recognize
that this generation wants and needs financial help. Paying off
their college debt is among their top goals. They have additional
financial goals as well and want help planning for them, but
they are quite often focused on getting out of their student loan
debt before making large purchasing decisions. Knowing and
understanding this can help you get off on the right foot with
millennial clients.
fact: Financial illiteracy is another common misperception
about millennials. The reality is, however, that millennials are
an incredibly risk-averse generation when it comes to money,
because they have seen two major stock market crashes already
in their lifetimes and understand how much damage it can do
to one’s wealth. As a result, they have a deeper distrust of the
stock market and banking industry than previous generations.
That doesn’t mean they are not interested in saving, however.
Millennials have a higher savings rate than previous generations.
They know they need to save money for retirement; and they
frequently hear how much retirement is going to cost them
when they get there. The generation wants to accumulate
wealth; they just need financial advice about how to accumulate
it in a way that feels comfortable to them.

myth: Millennials are Dependent myth: Millennials are Lazy

fact: Another perception of millennials is that they are
dependent, particularly on their families. This perception is often
viewed negatively by other generations. However, millennials
trust and seek out advice and guidance from their family
members, particularly their parents. Because of the significant
debt many millennials face, more of them live with their parents
as adults than in previous generations. Millennials view this as
a choice that is both pragmatic and convenient because they
are close to the people whose opinions they value and are
able to save money to get out of debt faster. Reframed, this
misconception can be viewed as an opportunity by leveraging
the millennial’s most trusted source...their parents. Advisors
with baby boomer clients can reach their millennial children
by shifting their approach. Rather than reaching out to the
millennial adult children directly, they can work with the parents
to help build trust and clout.
fact: The misconception that millennials are lazy could stem
from their need for instant and easy access to information.
Technology has made everything faster, cheaper, and more
available for all generations. Millennials have grown up with
constant technological innovation and, as a result, expect
efficient and immediate answers to their questions. They are,
after all, a generation that grew up with search engines at their
fingertips. Financial advisors who have a good online presence
and provide a convenient, quality online solution will find that
millennials will be loyal customers to them. A digital presence
is a must for millennials, and they will sing the praises of any
business that meets them wherever and whenever they
need them.

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 The Importance of Values
People use values every day to make decisions about their time and resources. Values are the beliefs that guide decision-
making and shape the way people want to live in an ideal state. While many believe that baby boomers and millennials have
little in common, the reality is that they have a number of overlapping top values. The common traits associated with the
values differ some by group, but the core values are strikingly similar. For example, baby boomers and millennials both have
family as their top value; but baby boomers align that value with caring both for their parents and children, while millennials
align the value with utilizing their parents for advice and guidance. Nevertheless, they both put their families first.

TOP 5 VALUES
Family
Care for children
Care for parents
1 Family
Dependent on parents
for advice & guidance

Work Ethic
Desire to care for family
Retirement savings
2 Relationships
Social connection
World travel with friends
BABY BOOMERS

3
Religion Loyalty MILLENNIALS
Church attendance Brand loyalty
Donations/Charity Relationship loyalty

Achievement
Success in work & life
“One up the Joneses”
4 Community
Social responsibility
Volunteering

Health
Enjoying retirement
Prolonged life
5 Achievement
Entrepreneurship
High education debt

Achievement is also a value the two groups have in common, but the actions aligned with the value differ considerably. Baby
boomers often equate achievement with success in work and life, and they define success by those around them. Millennials,
in contrast, align entrepreneurship and getting out of student loan debt as achievements. Nevertheless, both groups have a
strong work ethic and desire to achieve success as they define it.

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 Understanding Millennial Behavior
Planning, particularly goal-based planning, is something that is infrequently used by the millennial generation as a whole.
Due to developmental and environmental (technology) influences that millennials have experienced, a greater emphasis has
been placed on instant gratification. This mentality has even been labeled in popular culture as “YOLO” (you only live once).
With that in mind, what we found through our research is that millennials can’t achieve their goals without a plan any more
successfully than baby boomers can. What is needed is a planning mentality.

The Opportunity for Financial Advisors

We know that millennials are risk averse when it comes to money
and distrust financial institutions because they have grown up
watching stock market crashes and banking scandals. We also
A Holistic Solution
ADVISOR
recognize that millennials are a generation with a higher savings
rate than previous generations, and they trust their parents,
above all, to advise them on matters in their lives. And we see that
millennials have grown up with constant technological innovation
and expect businesses to provide convenient online experiences
and instant answers. Enlist Parents
Now that we’ve established millennial values and the unstated
opportunities from common misconceptions, advisors can create
a holistic solution for their practice that will better appeal to this Value Awareness
generation. By enlisting parents to help educate millennials on the
value of a planning relationship with a financial advisor, adjusting
the value proposition of financial advising to better fit the values of
millennials, and adapting to new technology, financial advisors can Technology
not only retain their clients’ children as clients, but they can also
recruit and retain new millennial clients.

Enlist Parents
If a financial advisor already has a millennial’s parent as a client, they are in a great position to acquire the children as clients if they
utilize the parent in their recruitment. Millennials are distrusting of the financial services industry, but trust their parents and look to
them for advice. Enlisting parents in the strategy will help prospective millennial clients understand the value a financial advisor can
bring to their lives.

One way you can do this is to ask your client for some information about their son or daughter. Rather than simply asking for a
referral or asking if you can call their child, ask them what is most impressive about their child. Get a little information about what the
parent is most proud of. Then ask the parent for permission to use that information when you reach out to their child. Not only will
the parents be more likely to give you the information you are seeking, but this will help you establish trust and build rapport with the
son or daughter early on.

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 Value Awareness
After family, millennials’ top values are relationships (social
connection), loyalty (relationship and brand), and community
(social responsibility and volunteering). Knowing this is crucial
when adapting a financial advising practice for the future. It
will be more important than ever that a firm’s values align with
what clients value. Having an online presence and frequent
communication with clients on a number of different platforms
(e.g., email, text, and social media) will be critical to gain the
brand loyalty of millennials. Ensuring the practice is also active
in the local community and is socially and ethically responsible
is also important to gaining millennial business. Having that
information prominent on the firm’s website is an easy way for
millennials to learn how their values align with the firm’s values.
Millennials also strongly value achievement, which is something
financial advisors can absolutely help them with. Millennials do
not want to be broke—they want to get out of student loan debt
and have the freedom to travel and make large purchases, such
as a house. By building the firm’s value proposition around how
it can help millennials achieve their financial goals, an advisor
can appeal to their desire to advance their financial status and
become more financially educated.
Prepare for the Future Now
After reading this eBook, we hope you have a better
understanding of how you can attract and retain millennial
clients. If you are interested in better understanding individual
values and how they influence behavior, we encourage you to
enroll in our Behavioral Financial Advice program. Behavioral
Financial Advice integrates traditional finance practices with
psychology and neuroscience to improve emotional intelligence
and competency through self-awareness exercises. You will not
only learn more about your own values and how they impact
your decision-making behavior, but you will also gain the skills
to help your clients do the same. This will help you work more
closely with your clients to develop financial goals that align with
their top values. Of the advisors who have completed the BFA
program, 97% reported that it increased their production, and
73% reported it increased their client acquisition.

Technology
Not only will adapting to new technology be important for
attracting millennial clients, but it is becoming increasingly
important for all generations too. We are currently living in
a tech-centric world, and people expect fast and convenient
solutions to their problems. Millennials want constant social
connection with their peers, families, and brands they care
about. The key to succeeding is building that connection with
technology and figuring out ways to meet millennials in the
online spaces where they spend their time.

In a 2015 InvestmentNews technology study, nearly 80% of high-

net-worth clients under 40 said they would leave a firm that did
not integrate technology into customer services, such as online
access and mobile apps. Robo-advisor platforms are another
option that can allow advisors to provide more immediate If you would like more information about the
self-service for customers. Incorporating robo-advisors into an Behavioral Financial Advice program, please
advising practice allows advisors to automate tasks like account
visit https://www.kaplanfinancialcom/bfa.
opening, investment rebalancing, fund transfers between
accounts, and tax-loss harvesting to make more time for
providing holistic financial advice. To grow your business and You can also contact our designation
provide better customer service than your competitors, it should specialist team at 800.717.3650.
be imperative that you adopt new technology into your practice.

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