Millennials may not earn as much as their parents, but they are expected to receive an influx of wealth as baby boomers begin to transfer their assets. In fact, over the next 30 to 40 years, millennials in North America will inherit more than $30 trillion. But will they continue to rely on their parents' financial advisers?
In most cases, the answer is no. Studies show that 66% of children switch advisers after they receive their inheritance.
Cerulli Associates reports that the average age of financial advisers is 50.9 years, with under 5% younger than 30. Firms could experience problems if millennials feel a disconnect between their ideals and those of their parents' advisers.
If your firm wants to hire millennial advisers, you'll have to take a slightly different approach. Here are some key characteristics that millennials are looking for in an employer, as well as how their perspectives differ from those of older generations.
What millennials look for in a workplace
While millennials do tend to switch jobs more frequently than their older counterparts, a PriceWaterhouseCoopers study shows that this generation is generally as committed to their work as older generations.
However, young adults have specific expectations when it comes to their work environment.
Millennials are more likely to look for a job that brings meaning to their lives and to the world. In fact, more than half of millennials would consider taking a 15% pay cut to work for a company that aligns with their values, according to a MaRS Discovery District/Bmeaningful survey. Plus, according to Capital Group, 82% of millennials believe it's important for companies to promote employee health and wellness — compared to 72% of baby boomers.
How to attract millennial advisers
By making small modifications to organizational structure and culture, recruiters and human resources professionals can attract and retain a new generation of employees. Below are three practical steps financial firms should take to appeal to millennial advisers:
1. Build a quality culture. A PwC study shows that young adults are looking for a community of like-minded people who inspire them. To meet these expectations, firms should build a cohesive culture that emphasizes teamwork and collaboration. A strong connection to the company mission and meaningful relationships with co-workers can also increase job satisfaction, thereby improving employee retention.
2. Leverage cutting-edge technology. As digital natives, many millennials are looking to incorporate innovation into their work. Financial firms have already increased their technology spending, but there are other cost-efficient ways they can appeal to tech-savvy employees. For example, firms should consider offering client meetings through video conferencing platforms or having a library of social media assets advisers can use.
3. Support professional growth. In the 2016 Deloitte Millennial Survey, 63% of respondents said they believe their leadership skills are not being fully developed. Millennials are drawn to companies that offer mentorship and professional development resources, and financial firms can make this a reality by providing robust training to employees. Plus, advisers who feel that their firm is dedicated to helping them succeed are more likely to remain with their employer.
Many financial firms are already investing in new technology to enhance the experience of their current advisers. Yet to secure their own future, companies need to bring in employees who are ready to carry the torch. By making small operational adjustments, firms can attract millennial advisers with the skills to serve the next generation of clients.
John Pierce is head of recruiting at Stifel.