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Fund Providers Offering Advisors Millennial Insights

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Much has been made about how advisors must learn how to appeal to the up-and-coming generation of investors. One fund firm decided it needed to assist that effort.

Overland Park, Kan.-based Ivy Funds teamed up with generational research firm BridgeWorks to develop an online platform designed to inform advisors -- many of whom nearing retirement themselves -- about what makes millennial investors tick.

It's just one of several approaches by fund providers to better understand the millennial generation of investors, the hope being that the viability of their offerings is protected too.

Better outreach can prevent losses, says Lori Dorsey, the senior vice president and marketing director at Ivy Funds, who recalls that she didn't even think to take on her father's advisor for her own finances.

"When I finally did get an advisor, which I did relatively late in life, it would have never occurred to me because I didn't even know my dad's advisor," Dorsey recalls. "So I took a recommendation from a friend."

In the next decade, Ivy Funds estimates that nearly one-third of U.S. advisors plan to retire, leaving more than 200,000 open positions for new professionals. Meanwhile, Dorsey estimates that nearly 84 million millennials alone are quickly emerging as the next generation of investors.

"It's a cultural change in the industry to suggest that there is any time that you don't need to know the family," Dorsey says. "Advisors cultivate relationships. That's what they do, and that includes the whole family."


Ivy Funds' resulting platform is GenLink, a Web-based program designed to provide advisors cost-free insight into the differences in generational personalities, demographics, financial outlook and wealth transfer.

"Most advisors aren't really targeting millennials at this point," Dorsey notes. "[Advisors] don't think [millennials] are in their wheelhouse from an asset perspective. But the oldest millennial is 35, so it's a little shortsighted to assume nobody has any money."

GenLink was specifically built to offer advisors insight into the character traits of younger clients, including financial statistics like average annual income, as well as a brief history lesson on generations from the Traditionalists (pre-1946) to Gen Edge (those born after 1996).

BridgeWorks researchers found that millennials, for instance, are media-savvy and collaborative, as well as risk-averse -- nearly 54% stating that managing debt is their biggest financial concern.

"I'm a member of a very skeptical generation," Dorsey says, explaining that Gen-Xers were the most disadvantaged generation during the financial collapse of 2008.

She adds that her generation is also the most in need of advice. "Many have multiple careers, young families and they're an entrepreneurial generation, and they're going to try and do it on their own time."

Other firms have also commissioned their own studies to get a better look into the trends of the next generation.

According to TD Ameritrade's "Millionaires in the Making" survey, nearly 55% of millennials hired their own advisor, while just 29% say they plan on keeping the same advisor as their parents.


Subtle differences can be perceived among generations. The high-potential millennial investor -- described in the TD study as those entering their peak earning years and are already accumulating assets -- prefer e-mail by a wide margin; however high-net-worth millennials are interested in a combination of email, phone and in-person meetings.

Phroogal, a financial education service focused on informing millennials about ways to make financial decisions, has taken this approach on the road. It launched "The Road to Financial Wellness" tour, a 10,000-mile road trip to 30 cities in 30 days, researchers and industry professionals plan to talk to young investors about wealth management.

The street team at Phroogal has collaborated with credit unions, nonprofits, financial institutions and government organizations to provide face-to-face advice to young adults via education workshops, fairs, coffeehouse discussions and impromptu street level discussions, according to statements from the firm.

"We want to tie financial education to achieving lifestyle goals, which is important to millennials," says Jason Vitug, CEO and founder of Phroogal.

"Personal finance isn't a hot topic of conversation but when you start talking about what you can achieve with the right set of information and tools, millennials are mobilized to listen and take action."


Dana Tatro, the senior vice president of U.S. insurance group MassMutual, agrees, citing a recent MassMutual Social Security survey where nearly 72% of respondents failed a true/false quiz on basic questions about Social Security retirement benefits.

Although their findings reflects the general U.S. population (not just millennials), Tatro says they "propose a tremendous opportunity and responsibility to companies like MassMutual and financial professionals for education."

"Younger generations and America's growing multicultural population, who are not currently being reached through traditional channels, presents a responsibility and opportunity," he adds.

Tatro cites the firm's recent launch of Society of Grownups, an educational initiative created by MassMutual to find a new, but old-fashioned approach to reaching younger clients.

Enrollees in the program cover core financial curriculum via classes, chat groups, supper clubs, guest speakers and special events.

While designed to provide insight on issues like paying down debt, negotiating salary, saving for a down payment and planning for the future, Tatro explains that the Society of Grownups initiative is just one alternative to the traditional product rollout designed to help the advisor.

"Financial planning is ultimately about people, their goals, and unique situations," he says. "Family circumstances, retirement planning needs and other personal situations are not 'one-size-fits-all.' For this reason, human touch in financial planning remains for the long haul."

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