Do Millennials Really Expect a ‘Free Lunch’ From Their Financial Adviser?

A new study finds that a significant number of wealthy Millennial investors literally expect a free lunch or other gift from their financial adviser for being a client, more so than other generations.

The report by the Spectrem Group – Millennial and Generation X Investors: Attracting the Next Generations of Wealth – reveals that nearly a third of the wealthy Millennial investors surveyed  (29%) expect their financial adviser to reward them with gifts or other favors in exchange for their business. By contrast, less than 1 in 10 wealthy Gen X investors (7%) expect these types of rewards from their advisers.

What type of gift or favor do wealthy Millennials prefer? It turns out that being taken to a meal (54%) was identified as the most preferred type of gift, followed by tickets to a sporting event (41%) and invitations to socials and happy hours (41%). Nearly a quarter (24%) preferred tickets to a cultural performance or an art opening.

Spectrem suggests that advisers would be well-served to understand that these types of perks can be important ways to acknowledge the value of younger, wealthy clientele. Moreover, the report adds that, “While a large number of older clients may be satisfied with regularly scheduled dinner meetings, there may be older generations who are interested in some of the activities identified by Millennials.”

Socially responsible investing was also found to be a key factor for wealthy Millennial and Gen X investors, who are more accustomed to it, compared to their older counterparts. In fact, more than half of wealthy Millennial investors (52%) view the social responsibility of their investments as an important selection criteria, compared to 42% of Gen X investors and less than 30% of WWII-era investors (defined as 71 and older).

Communication and Decision-Making

The study also reveals the changing dynamics in preferred communication methods among the generations. Millennial investors are significantly more likely than their Gen X counterparts to favor texting or instant messaging with their advisor versus e-mail or phone calls. More than two-thirds (68%) of Millennial investors say they would be comfortable texting their financial adviser, compared to less than a third of Gen X investors (32%).

Millennial and Gen X investors were also found to be much more likely compared to older generations to make joint financial decisions with their spouses. Nearly three-quarters of Millennial investors (71%) make joint financial decisions with their partners, compared with 63% of Gen X investors. By contrast, just over half of Baby Boomer (54%) investors make joint financial decisions with their spouses.

The report is based on research conducted with 200 Millennial and 200 Gen X investors who have a net worth (not including primary residence) between $100,000 and $25 million. The findings are also supplemented with Spectrem’s ongoing research with wealthy Baby Boomers and WWII investors.

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