As director of marketing, Matt oversees the breadth of go-to-market initiatives for Advicent, including product marketing, lead generation, and public relations. Drawing from a nearly decade-long background at Advicent, Matt works closely with the sales, product development, and executive teams to successfully align Advicent products with the evolving business needs of the financial services industry.
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I read an article recently that posed an interesting question: Are Millennials too trusting of robo-advice? Based on widely held beliefs, there seems to be a correlation between younger generations and their reliance on technology for financial advice and strategies.
Though the aforementioned article gives a number of reasons why Millennials may need to be wary about their overreliance on robo-advice, one trend stands out among the rest — Millennials appear to be investing with robo-advisors for shorter periods of time than those with traditional human advisors.
Short-term investing with robo-advisors
The revelation that, for most individuals, robo-advice is a short-term strategy is interesting for a number of reasons. First, Millennials are investing for shorter periods of time than other generations with a human advisor. Being the youngest generation means they have had the least amount of working experience and are relatively new to crafting strategies for wealth accumulation and accomplishing goals.
Advisors have a massive opportunity to engage with Millennial investors by determining which goals the cohort tends to prioritize. Even if a Millennial is investing with a robo-advisor for the sole purpose of saving for a home or paying off student loans, these are opportunities for financial planners to expand their existing relationships by engaging these individuals in the planning process.
Offering holistic financial planning to Millennials
Financial planning seems to focus on the pillars of all financial plans, such as retirement, saving for a child’s college education, and insurance coverage. The purpose of identifying a goal, however, is to understand what is important to that specific client. For Millennials, retirement is likely several decades away. They are also likely to have graduated with a massive amount of student debt that can follow them into their 30s. Oftentimes, saving up to buy a home can seem daunting in light of their existing financial burdens.
With discipline and sound financial advice, however, each of these obstacles can be turned into an accomplishable goal. Even though Millennials may be more inclined to engage with technology first, good technology will allow those clients to see through the lens of accomplishing short-term goals and expanding that thinking into long-term wealth accumulation.
To learn how financial planning technology can help you connect with clients like never before, click here.