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As millennials become a larger share of the Canadian financial consumer market, it is imperative that financial planners and financial advisors adjust their approaches to attract this growing demographic.

Recent research from the Public Policy Forum (PPF) in Ottawa shows millennials have a very different perspective on retirement and financial planning than previous generations. The PPF conducted roundtables with millennial investors across Canada to measure their views and perceptions on retirement and financial planning. Its research outlines the many challenges that financial planners and financial advisors will have in securing millennials as clients.

Here are some of the key findings from the PPF’s research:

  • Millennials are less likely seek out professional advice on savings and investments, and they prefer to listen to their peers rather than their parents or professionals. Using a “peer ambassador,” such as a lifestyle blogger, could be an effective way to reach millennials.
  • Millennials have an aversion to risk and are more likely to invest like their grandparents. They have never known higher interest rates. Financial planners and financial advisors will need to show them how to manage money when interest rates are higher.
  • Millennials are also highly skeptical of the traditional financial system as demonstrated by the growth, for example, of cryptocurrencies, which are not backed by governments or central banks. Financial planners and financial advisors will need to embrace these new non-traditional asset classes to help millennials in their investing strategies.
  • Millennials want financial advice linked to events and actions in their lives, not just advice when talking about RRSPs once a year. Financial planners and financial advisors need to focus conversations around events such as student loans or adding a newborn beneficiary.
  • Millennials are interested in receiving independent advice with no conflicts of interest. Financial planners and financial advisors need to provide advice, rather than simply sell products. They need to provide financial education, rather than a marketing campaign, and they need to deliver transparency by disclosing any product commissions that they may receive.
  • Millennials like to be communicated with beyond the traditional channels, so it is paramount to provide them with a combination of in-person, print and technology communication options.
  • Millennials feel the onus is on service providers like you to build more positive relationships. Financial planners and financial advisors need to take initiative and break down the barriers to the millennial world in order to build long-term relationships.
  • Millennials are more open to receiving services digitally. Fintechs are offering software and apps that bypass traditional financial services providers with millennials as their main targets. Millennials are also among the key targets for robo-advisors. Although millennials embrace technology, they are open to a mixed-delivery of digital and in-person advice. This hybrid approach is evolving; financial planners and financial advisors will need to understand this and determine what their value proposition is within these new relationship models.
  • It is also critically important for millennials to have the ability to invest ethically through socially responsible investing strategies that are in line with their values. There has been an explosion of products and solutions that track socially responsible investments over the past number of years. Financial planners and financial advisors need to study this growing area to provide millennials with investment strategies that meet their preferences.
  • In general, millennials desire independent financial literacy education, whether it be investing or debt management. Financial planners and financial advisors who provide independent financial literacy materials or build a network of resources where they can be found for their clients will be better at gaining the trust of millennials.

All of the aforementioned preferences are not totally unique to the millennial financial consumer, but they indicate how advice and service in the financial market will have to evolve. Financial planners and financial advisors who educate themselves, embrace and prepare for this new world will attract millennials and ensure the long-term viability of their practices.