Many financial advisors are missing out big time by failing
to better engage millennial clients, according to new research. Fifty-six
percent of advisors responding to Hartford Funds’ third annual Advisor Anxiety
Survey, released Monday, reported that they focused on attracting millennial
clients “less than other age groups” or “not at all” even as they identified
prospects in that category. At the same time, 70% said they targeted clients in
their late 20s and early- to mid-30s. Nearly two-thirds of advisors who were
not targeting millennials at all said they were also pursuing prospects in this
The term ‘millennial’ has become a buzzword in financial
services, being discussed constantly by financial firms and advisors, Hartford
Funds’ strategic markets director Bill McManus said in a statement. However,
our survey suggests a disconnect when it comes to understanding who falls into
this millennial category. In an attempt to filter noise, many advisors might be
missing valuable insights for attracting their younger client targets.
Hartford Funds conducted the in-person survey of 103
financial advisors in June. Poll respondents’ retirement plans and lack of
millennial engagement raised even more concerns, McManus said. Seventy-one
percent of advisors in the survey said they planned to work for at least 15
more years, and 53% planned to work for more than 20 years, yet they were not
focused on attracting millennial clients. More than half of advisors in both
groups targeted millennials less than any other age group or not at all.
Trending Risk Aversion
Fifty-seven percent of financial advisors polled by Hartford
Funds expected risk aversion to rise significantly in the next 12 months,
continuing a steady upward trajectory. This compared with 35% who had this
expectation in the 2014 survey, and 17% in the 2013 survey.
Because advisors foresee greater risk aversion among clients
in the coming months, they are in the unique position to help maintain focus on
the bigger picture and minimize clients’ tendencies to make emotionally-driven
investment decisions. Fifty-seven percent of advisors reported that market
volatility topped the list of issues that keep them up at night, while 51%
named interest rates and 46% international turmoil and its effect on markets.
Other issues interrupted their night’s sleep less. Forty-two
percent of advisors said they were concerned by clients’ anxiety about saving
and investing, and only 32% worried about attracting the next generation of
clients. Just 9% said inflation was a cause of worry.
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