In the ever-evolving financial planning landscape, understanding generational nuances is key to building and growing your business as younger generations seek financial advice. Our recent Planning Better Together research sheds light on distinct differences between Millennials, Gen Z, and older generations, highlighting the unique approaches financial professionals can adopt to engage and cater to the younger demographics effectively.

Millennials and Gen Z are not satisfied as spectators in their financial journeys. They seek active involvement, a desire to understand the intricacies of their financial plans, and the ability to explore diverse scenarios that align with their evolving life goals.

Millennial and Gen Z Market Opportunity

Our research uncovered that there is a growing demand for financial advice and about half the market will either be working with a financial professional or intend to do so in the next year. Looking at this market demand generationally, we discovered that 58 percent of Millennials and 63 percent of Gen Z have already engaged with or intend to seek a financial professional.¹

Not only do these younger generations indicate a desire to seek the services of a financial professional, but they also exhibit a strong willingness to pay for this advice. Across all ages of the representative sample we surveyed, the market is willing to pay an average of $835 for a comprehensive financial plan, however, Millennials indicated that they would pay significantly more at over $1,000.¹

Expanding Options for Advice Provider Engagement

Financial advice has expanded beyond financial advisors and planners to include a broader range of non-traditional providers such as financial therapists and counselors, workplace benefits providers, and even banks and credit unions. This shift is partly driven by demographic changes as younger generations are more open to considering alternative advice providers.²

This trend reflects a growing emphasis on well-being, inclusion, and the delivery of hyper-personalized services within the financial advice sector.² Collaborative planning offers an effective way to engage younger generations who prefer active participation in the planning process. Our research found that Millennials rank highest at 76 percent when asked about the importance of their planning provider working with them collaboratively.¹

Varying Generational Motivators for Financial Advice

To effectively engage with Millennial and Gen Z prospects in financial planning, it’s essential to understand their unique motivators. Our research revealed that economic uncertainties are key drivers for Millennials, highlighting the importance of addressing stability and risk management in advice tailored to this group. Gen Z, on the other hand, prioritizes understanding insurance and managing debt, making these key focus areas for resonating with them.¹

While negative life events spur the search for professional advice across all age groups, our findings show that positive life changes—like starting a new job, buying a home, or welcoming a family addition—are particularly motivating for Gen Z. Being attuned to how all life changes can prompt the search for advice allows financial professionals to proactively connect with clients during these pivotal moments.

Employing Technology to Enhance Collaboration

Millennials and Gen Z are digital natives, accustomed to interactive and technology-driven experiences. They expect financial planning to be a dynamic process, leveraging innovative tools and platforms that allow them to explore various scenarios, visualize potential outcomes, and actively participate in decision-making.

Our study found that younger generations are avid users of client portals—especially Millennials—and having a mobile experience is critically important as mobile usage increases significantly among younger age groups.¹

Key uses for an engagement tool like a client portal by Millennial and Gen Z clients include:

• Viewing and updating their profile
• Meeting scheduling
• Accessing financial accounts
• Messaging/communicating with their advisor
• Accessing on their phone/mobile app
• Managing assignments in the plan

The action-oriented mindset demonstrated by Millennials and Gen Z in the list above makes it clear that they are not content with passive involvement in the financial planning process, they seek active engagement in shaping their financial futures.

Tailoring Strategies for the Next Generations

To effectively engage Millennials and Gen Z in collaborative financial planning, advisors must adapt their approaches to align with the distinct preferences of these younger demographics. By embracing innovative tools and personalized experiences, advisors can forge stronger connections and foster long-term partnerships.

Personalized and Interactive Planning

One key strategy is to tailor financial planning experiences by integrating interactive tools that showcase different scenarios and recommendations. Millennials and Gen Z value the ability to explore diverse planning options, stress-test scenarios, and assess the potential impact of their decisions on their financial futures. By utilizing collaborative platforms that enable clients to choose action steps, address goals, and simulate future events, advisors can create a highly personalized and engaging planning experience.

Proactive Monitoring and Support

Additionally, advisors should prioritize staying updated on clients’ life changes and evolving financial goals. Offering continuous support in analyzing current courses of action and adapting strategies based on evolving circumstances is crucial. Regular plan updates and refinements demonstrate a commitment to proactive monitoring, fostering a sense of partnership and trust with younger clients.

Strengthening Advisor-client Bonds Through Collaborative Planning

By embracing the collaborative planning preferences of Millennials and Gen Z, financial advisors can forge deeper connections and cultivate long-lasting trust with their younger clients. These generations actively seek involvement in shaping their financial futures, valuing transparency and open communication throughout the planning process.

Build Your Practice by Engaging Younger Generations

Financial professionals can future-proof their businesses by understanding and adapting to the needs and preferences of Millennials and Gen Z. These younger generations bring fresh perspectives and welcome technology-driven approaches to financial planning. By embracing these shifts, advisors can position themselves as forward-thinking and client-centric, attracting a wider client base and staying ahead of industry trends.

Addressing the specific needs of younger clients can lead to long-term relationships and client loyalty. By proactively engaging with Millennials and Gen Z, financial professionals can enhance their services, stay relevant, and create a strong foundation for sustainable growth in the ever-changing financial landscape.

To learn more about the importance of building trust in client relationships, watch our on-demand webinar Key Insights into Becoming a Trusted Advisor.

Sources:

1. eMoney, “Planning Better Together” Research, June 2024

2. Willige, Andrea. “6 Trends Shaping Financial Advice in the Fintech Era.” World Economic Forum, 2024. August 6. https://www.weforum.org/stories/2024/08/six-trends-transforming-financial-advice-in-the-fintech-era/.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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