man and woman look at computer together

Overview

Born in the last two decades of the 20th Century, Millennials (ages 21 to 37) grew up during a period of globalization and domestic terrorism, the Great Recession and the housing crisis, and reality television.

A demographic snapshot

  • Millennials may be the most diverse U.S. generation to date. In fact, a 2015 report by the U.S. Census Bureau in Millennial diversity found close to 45 percent of Millennials are part of a minority race or ethnic group.1
  • More than one third of 25- to 34-year-olds have a college degree or higher level of education.
  • The median income amongst the generation is $34,837.
  • Over 57 percent are employed full-time year-round.
  • Nearly 29 percent are homeowners.2

Shattering the Millennial myth

While the oldest portion of the Millennials entered the workforce in the early 2000s, the earliest investors of the group would have entered a market during a U.S. recession, coming of age in the tumultuous time of the global financial crisis. This uncertainty has had an indelible effect, instilling an awareness surrounding the volatility of wealth and its impermanence. But it's also instilled a sense of fiscal responsibility.

In 2015, according to the U.S. Census Bureau report on the changing economics and demographics of young adulthood, one in three Millennials lived in their parent's home.2 This could be part of what perpetuates the stereotype of a “freeloader” generation, divorced from the realities faced by previous generations. But in reality, studies have shown Millennials are a generation with different priorities than the generations before.

The RBC Wealth Management Wealth Transfer study found that Millennials’ financial maturity, “shattered generational stereotypes.”

  • 80 percent say they feel responsible for understanding their own finances.
  • 69 percent prefer to do their own research to boost their financial literacy.
  • 38 percent say they already have a full wealth transfer plan in place.3

Investing for impact

Another defining trait of Millennials is their attitude towards investing for impact. Unlike older generations who typically wait until later in life to donate to charitable causes, Millennials want to have an impact now.

According to the 2017 Responsible Investment Association of Canada investor opinion survey:

  • 85 percent of Millennial investors are interested in impact investing.
  • 80 percent of Gen Xers and 69 percent of Boomers say they want to follow the lead of their children or grandchildren.4
    • This provides an opportunity to engage with clients and develop a responsibly geared planning strategy.

Best practices

Communication methods

  • Make them feel heard.
  • Begin discussions by asking for their thoughts and ideas.
  • Approach planning as a collaboration.
  • Avoid anything that could be perceived as overtly sales-driven or inauthentic.
  • Speak openly about topics like fees.
  • Take a tech-first approach:
    • Use technology to balance face-to-face communication with digital.
    • Utilize the digital capabilities of your custodian or broker dealer in order to supply your clients with a portal to review their assets online.
  • Provide information around impact investing and prepare fact sheets to help clients understand how investments can be tied to personal values.
  • Make financial planning about experiences, not objects; e.g.: How will a decision help enrich their life?
  • Leverage their community to connect with potential clients; Millennials like supporting and having support from their friends.

Meeting with them

  • Virtual meetings allow for face-to-face interaction when a meeting in person isn't possible.
  • When possible, schedule informal meetings in coffee shops or over lunch.
  • Host young professional or entrepreneur networking events where they can interact with your other clients.