Blog|6 min

Wealth management and Millennials: 6 tips for attracting the next-generation of clients

Kevin Au, Senior Director, Product Marketing

Wealth management and family office firms face one of the most fierce eras of disruption in decades. With the graying of Baby Boomers, the wealth baton is being passed to Millennials—a demographic that makes up more than 27 percent of the population and is due to inherit between 30 and 70 trillion in assets by the year 2030. This means great change is in order. And with great change comes disruption.

The transition of wealth from “old-school” clientele to tech-savvy, on-demand-data-seeking Millennials requires a new and modern approach. Onsite meetings and paper-based reporting won’t cut it. Just try asking a Millennial to deposit a paper-based check. These next-generation clients demand the convenience of digital information exchange and real-time access to their financial documents.

To help you better understand the Millennial market, the following list offers 6 sound tips for attracting the next-generation of clients and why it’s important to get in front of them now.

1. Recognize a growing market

Wealth management firms need to acknowledge the tremendous opportunity represented in the massive next-generation of wealth management clients. With trillions in assets up for grabs, the race is on to capture the Millennial market. The time is now to ensure you get your share of it.

And while a global pandemic has rushed the adoption of web-enabled technologies, the wealth management profession still has a long way to go to effectively engage and attract younger clients. This means it’s also time to recognize the need to adopt a new mindset. From embracing advanced technologies to investing in digitally proficient staff, wealth management firms must face the disruption of major change to secure long-term success.

2. Sign up to play the long game

As Millennials continue to grow into their prime wealth accumulation years, wealth management firms need to connect the dots between Millennial wealth and their firm’s long-term profitability.

Even though many Millennials have yet to amass great wealth, the trillions they are due to inherit over the next decade make them a prime target audience now. Investing in change geared to attract the Millennial demographic will pay off big in the long term. It’s all about playing the long-game to cement future profitability and sustainability.

3. Offer cloud-based and mobile technologies

Continuing to operate in a Baby-Boomer-driven model (paper documents, face-to-face meetings, phone-based communications) will only hinder your chance to capture your share of the multi-trillion-dollar Millennial opportunity. This requires a transition from the traditional technology stack to a platform that offers both web and mobile access.

From initial contact through to client acquisition, the Millennial market requires a rich, frictionless, and digitally driven experience. This experience begins with your website. Offer clients an advanced web platform where they can conduct business with you. Your website should serve as a communications hub—offering the ability to schedule appointments, pay invoices and access core client technologies online (think client portals). Exchange of information and communications must largely occur digitally. In addition, offer clients access to their financial data via a mobile app to further elevate the client experience.

Behind the scenes, the firm must also operate within an end-to-end cloud-based tech stack to ensure peak operational efficiency and mobile access for clients. From financial reporting to bill payment, all systems should integrate to streamline data flow, ensure digital ease of data processing, and support clients effectively and efficiently. The value that advanced technologies offer clients cannot be overstated, including:

  • Mobile capabilities for on-demand access to data anywhere, any time and from any device.

  • Real-time access to data versus paper-based methods.

  • Freedom from paper at every level.

  • Faster communication options via mobile app versus email or phone.

4. Assemble a tech-savvy staff

To support a digitally savvy client base, firms require a team that is equally technology-proficient—that is, those who speak the language and understand the online behavior of next-generation clients. Hiring the right people will help you attract and retain Millennial clients.

According to a J.D. Power survey (2019), the average age of financial advisors is 55 while approximately one-fifth are 65 or older. Advisors under the age of 40 account for only 11 percent of the population. This equates to a generational crisis when you consider the rise in Millennial clientele over the next several years.

Firm leaders who take a long, hard look at their technology infrastructure and invest in advanced, proven cloud technologies to attract and retain a new generation of employees are those who will be highly successful in also attracting and securing a Millennial client base.

5. Master your online presence

Millennials aren’t searching for financial advisors haphazardly online. Rather, they are sizing up contenders based on the company’s online presence. They are looking at where firms rank on Google, the number of current client reviews available, and a positive social media presence.

Mastering your firm’s online presence should also be a core goal and central to your business model. When you consider that Google holds more than 75 percent of the search market share and, on average, consumers read 10 client reviews before making a purchase decision, it becomes even more evident why firms require a strong online presence.

The internet is where Millennials find you, where they “see” what you are all about. Trust that this omnichannel group will do their homework before even considering your services. This leads to the big question: what does your online presence say about you?

If you’ve largely ignored your digital persona, it’s time to conduct a thorough and honest evaluation of your online presence. Millennials are researching firms online, making comparisons and following social media recommendations. So, if your analysis indicates that your firm falls short in any of these areas, invest the time to build a powerful and positive online presence that attracts Millennials. For many firms, this means simply starting with building out your Google My Business profile and being active in other social channels like Facebook and LinkedIn.

6. Offer digitally driven value-add services

Recent stats show that 62 percent of Boomers rely on an advisor while only 39 percent of Millennials do. This means that right out of the gate firms are behind the eight ball with this demographic. A winning conversion strategy is to offer highly desired and much-needed add-on services—beyond pure investment management advice.

For example, offering bill pay services supported by a premium, cloud-based solution further fortifies the client-advisor relationship and adds another layer of stickiness. Adopting a leading bill pay solution arms employees with an advanced online tool to process work efficiently and provide clients with a rich and frictionless experience. Such systems offer exceptional value across the board, including:

  • Automated data capture—AI-enabled Intelligent Virtual Assistant (IVA) functionality eliminates manual data entry of invoice information.

  • Streamlined approval process—Leverage pre-determined approval workflows so incoming bills are automated and routed to the right person.

  • Flexible, fast payment options—The ability to schedule and send payments via ACH, check, virtual card or international wire transfers eliminates the need to print checks (the system does this for you) and stuff envelopes. It also offers clients the convenience of online payments.

  • Automated sync—Eliminate double entry into accounting systems and leverage time-stamped, audit-ready trails.

Final thoughts…

The transition of massive wealth from Baby Boomers to Millennials over the next decade represents a huge opportunity to secure long-term profitability and growth. Early reach into the Millennial market is key, but it requires firms to make changes that include implementing advanced technologies, investing in a tech-savvy staff, mastering online presence and offering value-added services like automated bill pay.

With the transfer of trillions of dollars in assets, investing in change today to better support Millennial clients promises an epic payoff in years to come.

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