The other day, I asked a financial adviser in Vancouver about millennials. What's a good way to sell young people on financial advice?
He stopped me cold. They just confuse him, he said with a light laugh. End of conversation.
Millennials – those born from the early 1980s to mid-1990s – may seem a contradictory bunch. They tend to have conservative views on debt and risky stocks, yet they also tend to put as much faith in Google searches and social media as they do in financial advisers.
Granted, many millennials, particularly those in their early 20s, are still only just finding themselves as adults, but a huge swath are now financially established and looking for help.
But how can investment professionals sell advice to those who may find YouTube videos and Twitter chats about investing just as informative, if not more pertinent than a session with a self-appointed expert?
"Essentially, from all the research we see and what we get from client feedback, millennials are not dramatically different than younger people from previous generations," said Alan Depencier, vice-president for marketing at Royal Bank of Canada.
Yet "they get frustrated if you're not speaking to them in their language and through their mediums," he added.
They have certain preferences, studies have found. Their debt aversion is no surprise since they're buying their first homes in a sky-high housing market. And their general discomfort with the stock market is also understandable, given the market drop of 2008-09.
They also have other things they'd rather do. More than half of those surveyed recently by Goldman Sachs said they'd be willing to spend only up to an hour listening to financial advice.
"The real issue, I think, with millennials is that you need to engage them differently," Mr. Depencier said. "They still want access to your people and help and tools. They want to do it their way."
This changes the client-adviser relationship. Instant access to information on the Internet makes an adviser less of an authority figure and more someone who can validate the research the millennial has already done. "[Millennials] do a lot of validation," Mr. Depencier said.
To snag young minds, RBC has launched some uncommon advertising, such as a series of fake movie trailers on YouTube that depict the drama of home buying. One is for a horror movie, one a romantic comedy, and so on. On a more informative level, the bank also holds Twitter chat sessions on various financial topics, which are like drop-in seminars at a bank branch (which RBC also still does), but for those who would rather participate in Q&As online.
"We're using new techniques to engage them and start the conversation. But when you get into the meat of the conversation, it's not dramatically different than previous generations," Mr. Depencier said.
Like past generations, millennials are conservative with their money, though they can be seen taking selfies at fancy restaurants and on expensive vacations. According to Toronto-Dominion Bank, 41 per cent of millennials surveyed said they were prompted by parents or relatives to start investing.
Where did they learn about it? About a quarter cited their families, and another quarter indicated a financial adviser. (Eighteen per cent said they had figured it out on their own.)
In other words, millennials still value face-to-face advice from people close to them. "So while we are leaps ahead in terms of our access to information, it doesn't mean that the trusted source of that information is necessarily different," said Linda MacKay, senior vice-president of retail savings and investment at TD.
Access to so much information makes building trust the key.
"In general, they don't trust the people in our industry," Brent Vandermeer, portfolio manager and executive director in the private equity group of HollisWealth, noted in an e-mail. "They see us as salespeople and therefore they don't need us. The key to working with them is to show how we can help educate them on these topics."
Transparency helps gain that trust, which is why low-cost exchange traded funds (ETFs) are a popular instrument to introduce to young investors, Mr. Vandermeer said.
Advisers should also address goals very specifically rather than give the usual lecture on the basics of savings and investing.
That's Shannon Lee Simmons's tactic. Her advice goes much deeper into her clients' daily lives. An independent financial planner, she's a millennial herself, aged 30, with her own firm hiply dubbed The New School of Finance on Toronto's young-skewed downtown strip of Queen Street West.
Too often, advisers will give information on RRSPs and RESPs, on paying down the mortgage and setting some cash aside for emergencies – all of which is great, Ms. Simmons said. But who can afford to do all that?
So many millennials find themselves with competing goals – whether to buy or rent, to start a business or continue in their current job (if they have a job), whether to start a family or devote all their energy to work, and on and on.
"A lot of what I do is a reality check," Ms. Simmons said. Clients will come in and "say something like, 'I want to buy a house, get married, have a baby, start a business, do all those things.'"
But in most cases, Ms. Simmons said, these are goals that clients feel they should be doing, rather than what they can achieve now. "So it's working through what the goal actually means, and putting a dollar figure around it, and then working backwards on a very strategic plan."