Just as they pose a challenge for the tax and accounting professionals who want to hire them, the Millennial generation also poses something of a riddle for the financial planners who want to serve them.

The simple fact is that they’re a very hard market to crack.

“If you could reach them, it would be a win – there’s a lot of them,” noted Chad Smith, a wealth management strategist at HD Vest Financial Services. “Most advisors are struggling at acquiring Millennial clients, because they do everything on the phone – it’s hard for advisors to reach them. Many of them are probably using the DIY market.”

The oldest Millennials turn 35 this year, and so are already well into the stage where they should be accumulating assets and seriously planning for long-term life goals. In most other generations, this would have represented a major opportunity for tax pros and financial advisors alike. “Thirty years ago, I would have said, ‘Go after the Yuppies,’ but now it’s hard to get a 30-year-old client,” Smith said. “Thirty years ago, they would have been a great target market, but it’s changing.”

One of the major problems is the way Millennials have adapted to technology: “So many of their financial interactions have never involved a human being,” he explained. “Those early-life experience – starting an IRA, having their first baby – they’re doing it on their phone. A lot of tax pros don’t have Millennial tax clients, and a lot more of them are using technology and DIY methodology.”

Many tax professionals get two chances at a potential wealth management client – from regular sources like referrals, advertising and the like, but more importantly from preparing the client’s tax return. With Millennials more willing to turn to do-it-yourself technology for tax prep, it’s even harder for advisors to meet prospects.

To make matters worse, many aging practices can’t present a youthful face to potential Millennial clients. “Now that they need to get the next generation of advisors in, the 50-year-olds are having a hard time getting the 30-year-olds to be advisors,” Smith said. “They’re not lazy, they just work differently.”

Unravelling the riddle

“It’s harder to create a client base of Millennials,” Smith acknowledged, but that doesn’t mean it’s impossible.

One of the first places to start is by embracing technology and the digital world. “They are looking more toward the digital experience,” Smith said. “Sitting down with your advisor and chatting over a cup of coffee doesn’t seem to be what they’re looking for as much as being able to interact in a digital client experience. How do we create the client experience of the future?”

A strong social media presence is a great place to start, since Millennials are more likely to look for help there, and will check Facebook, Twitter, and review sites to vet more and more of the services they purchase. Advisors will also need to become comfortable with texting, instant messaging and video conferencing, since many Millennials prefer those forms of communication to phone calls on in-person meetings.

Having Millennials on staff will also help (presuming you can find and hire them), both for the insight they offer into the members of their age cohort, and for helping potential clients feel comfortable that their needs will be understood.

Apart from that, Smith said, advisors must trust to time. “The hope is that when they get to a point where, as they accumulate more assets and the risk of making a catastrophic error with their finances becomes much more grave, those clients will seek a human,” he said. A financial planner is much less important for someone who has only $5,000 to invest than for a potential client at a different level of wealth. “’Oh wait, I’ve got a million, I better talk to someone about this.’”


For more information about HD Vest Financial Services and how they can help you transfer a client’s wealth, visit hdvest.com/join or contact a Business Development Consultant at (800) 742-7950. HD Vest Financial Services® and its affiliates (collectively, “H.D. Vest, Inc.”) do not provide tax or accounting services. You should consult your tax professional regarding the tax implications of any investments.

The views and opinions presented in this article are those of Chad Smith and not of HD Vest Financial Services® or its subsidiaries.Asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment losses. HD Vest Financial Services® is the holding company for the group of companies providing financial services under the HD Vest name. Securities offered through HD Vest Investment ServicesSM, Member SIPC, Advisory services offered through HD Vest Advisory ServicesSM, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000.