Is Your Practice Ready for Millennial Investors?

Posted on by Paul Ellis

What’s the first thing Millennials will do when they inherit their portion of the $30 trillion wealth transfer from Baby Boomers?

Change advisors. That’s right. Investment industry research shows that Millennials plan to find advisors who understand them better and meet their needs more effectively than the advisors who have been working with their parents for years.(1)

The facts

It’s worth repeating that 75 million Americans born between 1978 and 2000 stand to inherit over $30 trillion from baby boomers during the next 30 to 40 years. (2) It will be the largest wealth transfer in human history. Is your practice ready?

Despite their struggle to pay off college tuition debt and find jobs that will help them afford a family household budget as well as save for retirement, this generation of Americans is determined that how they spend and invest their money will have a positive impact on society.(3) They use online financial planning software and, having lived through three deep recessions on the way to adulthood, have good reason not to trust their elders in the financial services industry when it comes to money matters.(4)

ESG & Millennials

So what can aging advisors do to make the assets Millennials will inherit stay under management with their practice when Mom and Dad make lifetime gifts or pass the wealth through inheritance?

Industry surveys of millennial investors also demonstrate a strong preference for sustainable and impact investment strategies and thinking long term about performance.(5) The unpredictable impacts of Climate Change alone, from their perspective, will make financial markets more volatile in the short term. A majority of Millennials also want off-balance sheet environmental, social and governance (ESG) factors to be considered in choosing best-in-class companies for their portfolios. (6)

Three steps you can take now

It’s time for the smart 55-year-old white male advisors out there to make some choices related to this research. Women advisors have been leading the way with ESG investing, so take a cue from their playbook. Here are some suggestions:

First: Begin your search for the right succession partner who can start building relationships with Millennial investors. You should expect that it will take at least two years for that process to unfold before you begin receiving a monthly payment for transitioning your client relationships to that partner.

Second: Bring a Millennial advisor into your practice to begin building those adult children relationships and plan for at least a partial transition of your practice to this next-generation advisor.

Third: Work with a consultant to gain a competitive advantage for the future by integrating sustainable and impact investment strategies into client portfolios now. At the same time, you should be building relationships with the adult children of your aging clients through these ESG strategies, which are the new normal for millennial investors.

I’m consulting with advisor practice owners who are bringing a son or daughter into the family practice as well as with advisors who have found a young CFA or CFP partner for the future. In either case the expectation is that the coming millennial wealth transfer is more likely to stick around based on the current practice owner’s astute personal long range financial planning process and goals.


(1) Price Waterhouse Cooper Global Private Banking/Wealth Management survey

(2)  The “Greater” Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth, Accenture, 2012

(3) Spectrem Group –


(5), (6) 2013 U.S. Trust Insights on Wealth and Worth