Technology has forever changed the way people shop for goods and services as well as the way we engage with the companies who sell these goods. Behemoth online retailers like Amazon offer wide product selection, price comparisons, customer reviews and next-day delivery with just a click of a button. Information is more readily available to consumers today than at any time in history.

But for the young, rising demographic of millennials (those born between 1982 and 2004), this is all they've ever known. As this generation becomes a more prominent part of the investor community, their buying habits and expectations gathered from the age of digital technology and information manifests in all facets of their lives, including investment products.

ETFs have become an increasingly popular way for millennial investors and those who advise them to build portfolios. A recent survey of ETF investors from Charles Schwab found that 66% of millennials expect to boost their ETF holdings in 2017. Additionally, millennials have placed 36% of their investable assets into ETFs, which is considerably higher than the 23% allocation reported on average by investors of all ages.

Millennials are attracted to ETFs for a number of reasons. Because of the rise of exchange technology information on product strategies as well as fund trading and liquidity is readily available. Millennials are more comfortable using technology to invest than any prior generation, and because of the exchange-traded nature of the products, they are easy to access through online brokerage accounts that have risen in popularity and improved the educational resources available to investors online.

Another attractive feature of ETFs for millennials is the balance of value and price. Many ETFs are available for little or no trading commissions as transaction fees continue to fall industry wide. Considering ETFs carry an average expense ratio of 0.44%, compared to 1.16% for all mutual funds, according to our calculations using Morningstar data, it's no surprise this generation has such a strong affinity for ETFs that deliver cost effective value in a way that is easily accessible to online investors.

Currently, there are 92 million millennials in the U.S., making this group the largest generation in our nation's history. As the generation ages, their investable assets will only increase, which means the amount they allocate toward ETFs also has room to grow.

The ETF industry must do more to cater to this demographic and ensure they focus on their customer and investor experience for decades to come. To continue to foster millennials' interest in ETFs, the industry needs to consciously do three things:

EDUCATION IS THE BEST SALES TOOL

Given the explosion of available information, the millennial generation is particularly adept at doing their own research and acting independently when making purchases. Their behavior is no different when it comes to their investments. Gone are the days when financial advisors drove the conversation and "sold" investment products to their clients. Instead, successful advisors now spend more time listening to their clients and helping them chart a path to success. ETF providers play an increasingly important role in this new marketplace by providing quality, timely information that give both investors and their advisors access to important educational material.

However, the proliferation of information makes it even more important to deliver education in a manner that is pithy, concise and digestible. Quality ETF education needs to be accessible to all investors as the increased availability of ETFs continues to expand the number of investors buying ETFs.

SIMPLIFY THE MESSAGE

Millennials form deep connections with the products they consume and the businesses with whom they transact. Similarly, this generation wants to feel connected to their investment portfolios. Delivering information on multiple platforms (increasingly social and digital) to allow client engagement is increasingly important. The expectation of information is higher than ever and failure to meet this expectation is failing to connect.

ETF providers who are able to relay their value proposition succinctly and who are able to reach and develop relationships with millennial investors will benefit most from their growth as investors.

EMBRACE THE GROWTH

Many millennials watched their parents fall victim to the dot-com bubble in the late 1990s and then get clobbered by the subprime mortgage fiasco and subsequent Great Recession in 2008.

Unsurprisingly, they've been conditioned to be fee-conscious and diligent in their research. ETFs have the perfect product structure and value proposition to be a meaningful solution for millennial investors.

The industry can further this growth by continuing to expand the types of ETF strategies that are available to investors. The rise of advanced beta strategies show there is an appetite for more active return streams as investors are looking to outperform the broader market.

To further help meets the needs of and be appealing to millennials ETFs with differentiated methodologies outside of traditional cap-weighted indexes must take a more prominent position in our industry. Additionally, companies bringing innovative methodologies to the market need to explain their differentiated product in a digestible manner so the millennial generation can form a connection with it.

Phil Bak is CEO and Kevin Quigg is chief strategist at ACSI Funds, an Ann Arbor, Michigan-based investment advisory firm.

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