— Enough already with the stereotyping of millennials
living in their parents’ basement and drowning in
may be true for some right now, but the 35-and-under
crowd now makes up the majority of America’s labor
force. It’s just a matter of time before they will be
on their way toward financial independence — if they
financial services industry, which has long been focused
on serving well-heeled baby boomers, is waking up to the
fact that millennials and their older brethren, the
Generation Xers, represent a future gold mine.
only are young professionals heading into prime earning
years, this next generation of potential investor stands
to inherit an estimated $30 trillion in assets from
their elders over the next three to four decades,
partaking in the world’s largest generational transfer
do we start to connect with the 25- to 45-year-old who
doesn’t have the juicy million-dollar portfolio and
the gray hair just yet, but really is going to be the
lifeblood of our business five, 10 or 15 years down the
road?" asked Matt Cosgriff, a 27-year-old
millennial and financial adviser, who convinced his
bosses at BerganKDV Wealth Management in suburban
Minneapolis to let him develop a line of business
tailored to young professionals.
Lifewise, which Cosgriff launched in September, the
approach is geared to a generation whose financial
values, styles and needs are strikingly different from
their parents and grandparents.
young professionals don’t want lengthy face-to-face
meetings in a glassy office. They are fine with a
virtual online chat or using Web-based tools as a
starting point and checking in via text or email,
Cosgriff and others have found.
boomers are much more in tune with delegating to an
adviser: You do it. We trust you," Cosgriff said.
"Millennials are skeptical of financial services in
general. They are skeptical of Wall Street, skeptical of
big banks. Young people want to partner with someone
they trust. They want to see some options and have a say
in what’s going on."
experts say millennials and Gen Xers will need to start
saving much more aggressively than previous generations.
recent report estimated that those now in their mid-30s
will need about $1.8 million to enjoy a stress-free
retirement, based on predicted rates of inflation and
possible reductions in Social Security.
of the responsibility will land on their shoulders than
in previous generations. Precious few can count on a
guaranteed pension, and more young people are earning
money through the "gig" economy, relying on
freelance jobs and short-term assignments. Even those
with a 401(k) plan at their workplace must figure out
how to manage among dozens of investment choices.
time to engage this younger generation is now, urged a
2012 report by Pershing LLC aimed at investment
professionals. Young people tend to be less satisfied
with their current financial advisers, the report noted,
and those who inherit wealth seldom keep assets with
their parents’ investment professionals.
next generation trusts algorithms, logic, their
peers," said Lisa Steffes, CEO of Brightpeak
Financial, a new division of Thrivent Financial geared
toward young investors. "They believe in
simplicity, transparency. They want it to make sense and
to know they can trust you. They’ve watched terrorism,
they’ve watched their parents get screwed by the stock
market or the job market. They’ve got all this
information at their fingertips, but know that not all
information is created equal."
in Minneapolis, Brightpeak launched in 2012 and
initially sought to use a traditional face-to-face
approach to reach millennials and Gen Xers. It didn’t
retooling, Brightpeak relaunched last fall with a
stronger online component and a website brimming with
faces of young people and families reflecting diverse
ethnicities and backgrounds. The company is working with
about 7,500 young people, and within the next five years
expects to do about 80 percent of its work through
online tools and email, with phone conversations for
need guidance on their own terms — which does include,
how do I get out of my student debt," said Steffes,
a 54-year-old baby boomer and mother of a couple of
millennials. "And they do like experiences, they do
value dinner out, they do value travel. Good financial
planners can figure out how to bring those values into
agreed that the old model of "invest, invest,
invest" doesn’t resonate with his clients at this
stage of their lives.
young professionals, the American dream looks very
different. Boomers wanted a big house, to drive a nice
car, live in the suburbs," he said. "Millennials
are much more apt to want to be happy in their careers,
even if it means making less money. They’re OK living
in a smaller house. We help them get clear about what
they want and build a plan around that."
notion of "transparency" is key for this
generation, he said.
Lifewise website lists fees for services that vary from
a one-time consult of $700 to more intensive planning
ranging from $1,000 to $2,500, offered in a monthly
subscription fee. He’s got a roster of almost a dozen
clients, plus about 30 people have registered for some
of the free online services.
think our prices are competitive, but millennials expect
everything to be free," he said. "Gen Xers are
apt to understand a professional service is going to
cost you something."
Keysser, 26, considers himself an outlier because even
though he works on commission — which accounts for
half of his annual income and means he must manage wide
monthly swings in cash flow — he has started to save
and invest, unlike many in his generation. He
participates in his company’s matching 401(k) plan and
is setting money aside to buy a condo.
he is confident living within a budget, Keysser turned
to Cosgriff for advice on longer-term planning, meeting
informally at a coffee shop.
about my age, so it was easy to relate to him,"
Keysser said. "Some people want a gray-haired guy
in a nice suit. I’m OK meeting someone my age. At the
end of the day, they’re all using the same tools, and
investing in the market isn’t what it was 40 years