Millennials Adviser surfing

NAPA Reports Millennials May Be Hard for Advisors to Reach

A recent study by Hearts & Wallets Money Movement revealed a large hidden number of households that show dissatisfaction with their current providers, but haven’t made a move.

Quoting NAPA, focus groups were conducted and investors cited concerns about fiduciary regulation and its prospective influence:

  1. Nothing of value is free
  2. Limiting the other party’s incentive to help me may hurt me
  3. The government can’t be trusted any more than private companies
  4. Less competition hurts consumers

The generation gap is exposed again. Millennials (20-30 year olds) show a different perception about reduced competition being helpful for consumers. Heats & Wallets Vice President Todd Hiller indicates that the Millennials’ experience comes from a different economic cycle than older generations. Many of this group are beginning with a heavy load of student loan debt which creates a significant burden to long-term investment goals. Not only are their perspectives different, but so are their behaviors – such as low risk tolerance for investing. Additionally, there are fewer Millennials in employer sponsored plans, although this group is statistically a large generation.

Hearts & Wallets thinks Millennials are going to need help balancing short-term/long-term needs with debt servicing and greater employment participation in the Gig Economy. The focus group participants indicated they got the message from providers, but it’s not at the top of their mind – or they don’t necessarily believe it – because of other issues. Hearts & Wallets believes Millennials are going to have a difficult time focusing on long-term investments when the economy shows income uncertainty and debt overshadows retirement savings.

Additional Findings

The focus group participants found the promotion of combined investment and insurance products appealing, especially considering the future of the workplace and reacted to proposed concepts on financial wellness and an invested emergency fund.

Investors are looking to move – approximately 47 million households with $15 trillion – plus the Americans who are actively shopping (another 26 million households with another $13 trillion), or put another way, over one in five households are actively thinking about moving money now. Job changes are the best time to make the most of lethargic investments and 53% of consumers don’t want to leave money with a former employer’s plan.

Should you have any questions about rollover and withdrawals, please feel free to contact your QBI Consultant to go over your plan's loan and hardship procedures. QBI maintains all necessary documents which are accessible to you on demand.

Overall, Hearts & Wallets believes there are a lot of challenges with the future generations of investors who appear to be more independent-minded consumers influenced by a different set of factors. This dynamic is what drove Hearts & Wallets to do their research.

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