Talk about your Generation Gap! There’s a pretty big one when you look at the demographic bands of the financial advisor community.
Check this out:
- The median age of the 300,000+ financial advisors in the USA is about 50. (In Canada, the median age is even older…54.)
- 21% of advisors are 60+ in years.
- On the other end of the spectrum, just 5% of financial advisors are younger than 30.
The plain truth is that there are very few financial advisors who are Millennials, i.e. those who were born within the approximate date range of the early 1980’s to 1995 or so. Yet, at 80 million strong it is obvious that Millennials (also known as Gen Y) are a big part of the future of the industry, as future clients and future financial advisors.
What’s also interesting is that Millennials have a somewhat bad rap, at least in the stereotypes of the popular press. For example in a recent American Express study, managers across multiple industries were interviewed with respect to their impressions regarding Millennials. Three words came up a lot: Entitled. Disloyal. Lazy.
Yikes! Not good.
Here’s the thing though. When digging deeper, these stereotypes, like many typecasts and assumptions, are way off base.
Entitled and Lazy. Not so fast. 44% of Millennials who are/were students worked to help finance their education. In a Rutgers University study, they identified Gen Y’s as workhorses who have a persistent hunger for new experiences, take advantage of opportunities, and are willing to push boundaries. In another study by Bentley University, they found that Millennials view making a positive difference in the world as more important than achieving professional recognition.
Disloyal. Another stereotype that comes up is that Gen Y lacks company loyalty. While the average tenure at a firm for Millennials is shorter than their older colleagues (2 years vs. 7 years for Baby Boomers), this doesn’t tell the whole story. Numerous studies have shown that Millennials benefit from regular feedback, and a clearly-articulated set of expectations in their workplace…in order to feel fully engaged. Guess what? Managers fall far short here with respect to their responsibility as managers and leaders, with only 20% of managers providing annual reviews on a consistent basis.
@DanSchawbel, author of Promote Yourself, is a Millennial himself and a subject matter expert on Millennials. He says, “Everything you’ve heard about the millennial generation is wrong. Millennials are the largest, most diverse, most educated generation in American history. Instead of getting frustrated with them, support them as they make positive change in our world.”
He observes that:
- 81% of Millennials have donated money, goods, and services.
- 75% see themselves as authentic and are not willing to compromise their family and personal values.
- 61% are worried about the state of the world and feel personally responsible to make a difference.
- 92% believe that business success should be measured by more than profit.
[Want more fun facts about Millennials? Dan Schawbel has compiled them here.]
At the moment, within the financial advisor community the power dynamic is heavily skewed towards the advisors who are “older”. Indeed, financial advisors who are 60+ years old control $2,300,000,000,000 in client assets.
Yet, this is all due to shift. Next year, Millennials will comprise 36% of the US workforce. In ten years, it will be close to 75%. It behooves the financial advisor industry to get to understand this emerging generation, as future colleagues and clients…and not be bound by assumptions that hold us back.