It has been estimated that millennials will inherit $30 trillion from their baby boomer parents, in a phenomenon being called: “the great wealth transfer.” However, how millennials will handle this takeover is the unanswered question that this industry is asking. Millennials have been slower than boomers to embrace investment products, have been said to have a weaker grasp of what financial advisors do, and lack trust in banks and financial institutions.
If you’re a marketer in financial services, that $30 trillion figure is certainly quite alluring. But, to win a share of it, financial marketers must first address the behaviors and sentiment changes in their marketing or risk their messaging falling upon deaf ears. Here’s what you need to know about targeting this group:
Not as unusual as you may think: Millennials may seem very unique to financial services companies, but their behaviors are actually closely aligned with middle-aged investors (Gen X). Neither group is as prolific as boomers, who are much more engaged in financial services products and news, across the board, and more likely to interact with an ad or financial content. According to our data, boomers generally expressed more interest (usually 40% or more) in financial services product than any other investor group.
Millennials are interested in the basics: Our data found that millennials are not actually disengaged in finance. Rather, in some cases, millennials are more engaged than Gen Xers or almost as engaged with them. For example, millennials demonstrated intent in basic financial products, such as bank accounts and credit cards. Specifically with regard to bank accounts, millennials are about 14% more interested than Gen Xers. Millennials are also almost equally interested in credit cards as Gen Xers.
Not thinking too far ahead: Some millennials are thinking about their future in terms of mortgages and IRAs but demonstrate product interest that is far behind baby boomers and slightly behind GenXers. Our data shows that millennials are half as interested in IRAs and mortgages compared to boomers.
Financial services need to build trust: Millennials are half as interested in financial advice products than baby boomers and less interested generally in financial planning products, validating a recent Deloitte study that found that: “Millennials have a negative perception of financial planners,” and the need to overcome this with pricing transparency.
Socially Aware: Millennials are known for prioritizing happiness and work-life balance. Although they may earn less money, or have higher debt related to student loans, millennials are almost equally interested in charity than Boomers and Gen Xers. They also demonstrate a higher interest in newer types of investments such as marijuana and crypto than they do with many more traditional investments.