Where Does Financial Advice Fit in the Age of Information?

Written by CUNA Mutual Group Annuities

When a quick Google search pulls up 10.4 million results for “do it yourself” financial planning information1, it’s a pretty convincing argument for investors to forego a financial advisor partnership in favor of online options. What’s being overlooked is a common misstep of the digital age: confusing information with advice.

Millennials (ages 17–35) are very comfortable online — spending about 53 hours there every week2. — and they access plenty of information about how they “should be” saving3 and how to build a financial plan without a professional financial planner.4 In addition, they tend to turn to social networks for commentary about financial markets — a full 91% of affluent Millennials do so (compared to only 53% of their Gen-X counterparts)5 — and the deck seems stacked against you and all other financial advisors.

So how do you prove the benefit of cultivating a relationship with a financial advisor over Internet advice? Here’s the reality: Millennials and generations beyond will likely be more greatly influenced by the digital landscape and easy access to information. Some will even ignore the potential downsides6 and make financial and investment decisions based upon that information. There’s not much financial advisors can do about that.

However, maybe your job isn’t convincing them that “do-it-yourself financials” is bad. Maybe it’s demonstrating to them that there’s more to a secure future than point-and-click predictions — that sifting through the products, services and advice they may encounter online is a job that financial professionals have already done. Ultimately, by leveraging an advisor’s expertise, there’s time and money to be saved, and smart decisions to be made, backed by known experience.

To actively engage and attract Millennials7, re-think your role as an advisor and develop an approach that includes:

  • Educational opportunities. Gone are the days of advisor-as-service-provider. Millennials don’t want an advisor to dictate their choices; rather, they want a plan co-creator and trusted source with whom they can develop a one-on-one relationship.
  • Personal portfolios. Millennials are fans of purposeful investing, meaning they’re likely to forego standard mutual fund options for those that are perceived as directly making a difference, like clean energy, renewable resources, etc. Portfolios that both perform and make investors feel good are the goal.
  • Concise communication. Fast, accurate information and responses by text or email are the preferred communication styles of Millennial investors. Your marketing materials should reflect these preferences as well: short, easily digestible and available electronically.
  • Online accessibility. Before Millennials contact you, there’s a better than average chance they’ll search for you online. If they can’t find you or what they find is outdated, they may think twice about reaching out. It may take some time to build an online presence but, at the very least, pay attention to the basics like keeping your LinkedIn profile fresh with an updated photo, summary and affiliations.

Even with your efforts, they may not completely abandon a “do-it-yourself” approach to finances, but they’ll also know you’re there to help them if their plans fall through.

Another good place to start building credible relationships with younger investors is by reaching through your current client base to their beneficiaries and their families. Learn more about how and why by view the Continuing Relationships with the Next Generation infographic.

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