Matt is a 2009 graduate of the University of Michigan and has worked in multiple roles at Advicent. He loves talking about financial planning and the value it brings both to advisors and to their clients. When not discussing FinTech trends with advisors, he enjoys spending his time outdoors with his wife and their dog.
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While it may not be the most exciting topic for most Americans, providing debt management and budgeting advice for your clients may provide an unlikely avenue into financially serving high-earning Millennials.
Advisors often talk about trying to attract the next generation of wealthy clients and assume that simply adding digital services will attract more Millennials to their practices. However, some Millennials are more attractive to advisors than others, and we will refer to them as HENRYs (high-earning-not-rich-yet).
What HENRYs want
HENRYs provide unique opportunities for advisors to address a clientele that have the ability to quickly amass assets once they have received the proper financial guidance.
According to an Equifax study, HENRYs struggle with a number of easily solvable financial issues. These issues range from exorbitant discretionary spending ($68,000 annually for Millennial HENRYs) to high levels of debt (which averages $160,000 across mortgages, credit cards, and other loans).
However, according to the 2015 Capgemini United States Wealth Report, the confidence that high-net-worth individuals (HNWI) under the age of 30 (not exactly HENRYs but similar demographics) have in wealth management relationships is trending downwards. These under-30 HNWIs had a tendency to prefer lower-cost digital services and digital contact from their advisors at much higher rates than older generations.
Putting it all together
What does all of this mean? There is clear opportunity when it comes to attracting and prioritizing younger clients to your firm. You need to be clear, however, in addressing very specific planning needs and desires for these potential clients. Young HENRYs have clear needs from budgeting and debt management strategies and represent a clear path into a desirable demographic with long-term potential of asset accumulation.
To learn how to appeal to clients in a rapidly changing industry by using Advicent technology, click here.