Hands stack coins on a white table, arranging three columns; the person wears a blue shirt, suggesting a context of financial planning or saving.

Financial Planning for Millennials: How to instil confidence in the financial planning process

The $30 trillion Millennial wealth transfer

The image of the broke Millennial is about to change. Over the coming decade, $30 trillion USD1 is expected to be passed down to Millennials from their parents, in the so-called “Great Wealth Transfer.” Over the next few years alone, Millennial earning power is set to increase by 75%.2 This raises the question: how are Millennials going to manage their soon-to-be inherited wealth? 

Firing their parent’s financial advisors

Data suggests many may start by firing their parents’ financial planners. Coming of age in a tumultuous economic landscape has endowed Millennials with a different set of values than those held by previous generations: they’re more likely to prioritize self-expression and self-actualization than Boomers — a shift that can result in higher ethical standards for investments, valuing professional flexibility, or opting for a lower-paying job in favour of social impact.3

This being the case, perhaps it’s not too surprising that two thirds of Millennials decide to cut ties with the financial professionals who advised their parents after receiving their inheritance.4 The financial guidance that served the needs of past generations is no longer aligned with what younger clients are looking for.

Planners must pivot to address Millennial priorities

Planners — and their employers — have a choice: adjust their service offering or risk losing major market share as Millennials leave in droves. In order to best serve this cohort, financial planners working with Millennials must be prepared to face a new set of client expectations, desires, and challenges.

Fortunately, planners can harness their advantages over fin tech platforms (namely, their understanding of human behavior) to provide invaluable services to their clients. If they do nothing to adapt, they risk losing business as the market shifts. But doubling down on their unique abilities can create stronger, longer-lasting ties with Millennial clientele. 

References

  1. Choi, A. (2018). How Younger Investors Could Reshape the World. Morgan Stanley. Retrieved from: https://www.morganstanley.com/access/why-millennial-investors-are-different
  2. The Economist. (2020). Wall Street will soon have to take millennial investors seriously. The Economist. Retrieved from: https://www.economist.com/finance-and-economics/2020/10/20/wall-street-will-soon-have-to -take-millennial-investors-seriously?utm_campaign=editorial-social&utm_medium=social-organic&utm_source=linkedin
  3. FP Canada. (2021). Values & Priorities of Millennials in Canada: Synthesis & Application Report. FP Canada Research Foundation. Retrieved from: https://www.fpcanadaresearchfoundation.ca/media/ypqgzzjm/fp-canada-tdl-value_priorities-millennials-white_paper.pdf
  4. Skinner, L. (2015). The great wealth transfer is coming, putting advisors at risk. Investment News. Retrieved from https://www.investmentnews.com/the-great-wealth-transfer-is-coming-putting-advisers-at-risk-63303
  5. Forbes. (2022). Millennial Money: Financial inspiration and insight for a generation. Forbes Media. Retrieved from: https://www.forbes.com/feature/millennial-money/#26b0f4114799

About the Authors

A woman is smiling, wearing a blue cardigan over a striped shirt, standing against a concrete wall with green plants and dappled sunlight in the background.

Sarah Chudleigh

Sarah Chudleigh is passionate about the accessible distribution of academic research. She has had the opportunity to practice this as an organizer of TEDx conferences, editor-in-chief of her undergraduate academic journal, and lead editor at the LSE Social Policy Blog. Sarah gained a deep appreciation for interdisciplinary research during her liberal arts degree at Quest University Canada, where she specialized in political decision-making. Her current graduate research at the London School of Economics and Political Science examines the impact of national values on motivations to privately sponsor refugees, a continuation of her interest in political analysis, identity, and migration policy. On weekends, you can find Sarah gardening at her local urban farm.

A man in a blue suit and red tie smiles while standing indoors, surrounded by office plants.

Dr. Brooke Struck

Dr. Brooke Struck is the Research Director at The Decision Lab. He is an internationally recognized voice in applied behavioural science, representing TDL’s work in outlets such as Forbes, Vox, Huffington Post and Bloomberg, as well as Canadian venues such as the Globe & Mail, CBC and Global Media. Dr. Struck hosts TDL’s podcast “The Decision Corner” and speaks regularly to practicing professionals in industries from finance to health & wellbeing to tech & AI.

A person sits smiling, wearing a checkered shirt, surrounded by indoor plants and a dimly lit interior featuring reflective glass surfaces.

Katie MacIntosh

Katie MacIntosh is Lead Editor at The Decision Lab. She is interested in the intersection of behavioral science, culture, and new communication technologies. Before joining The Decision Lab, she contributed to research on the neurochemical bases of memory and the social psychology of the internet. An aspiring polyglot, she has studied a number of languages, including as an exchange student in Germany, Japan, and South Korea. Katie graduated from the University of Toronto with a Bachelor of Science in psychology and linguistics.

About us

We are the leading applied research & innovation consultancy

Our insights are leveraged by the most ambitious organizations

Image

I was blown away with their application and translation of behavioral science into practice. They took a very complex ecosystem and created a series of interventions using an innovative mix of the latest research and creative client co-creation. I was so impressed at the final product they created, which was hugely comprehensive despite the large scope of the client being of the world's most far-reaching and best known consumer brands. I'm excited to see what we can create together in the future.

Heather McKee

BEHAVIORAL SCIENTIST

GLOBAL COFFEEHOUSE CHAIN PROJECT

OUR CLIENT SUCCESS

$0M

Annual Revenue Increase

By launching a behavioral science practice at the core of the organization, we helped one of the largest insurers in North America realize $30M increase in annual revenue.

0%

Increase in Monthly Users

By redesigning North America's first national digital platform for mental health, we achieved a 52% lift in monthly users and an 83% improvement on clinical assessment.

0%

Reduction In Design Time

By designing a new process and getting buy-in from the C-Suite team, we helped one of the largest smartphone manufacturers in the world reduce software design time by 75%.

0%

Reduction in Client Drop-Off

By implementing targeted nudges based on proactive interventions, we reduced drop-off rates for 450,000 clients belonging to USA's oldest debt consolidation organizations by 46%

Read Next

Notes illustration

Eager to learn about how behavioral science can help your organization?