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 Those now 21 to 31 years old will control $9 trillion in assets by
2018, and that will continue to grow, Deloitte estimated.
Millennials also stand to inherit some $36 trillion by 2061,
according to Boston College's Center on Wealth and Philanthropy.
"We have a huge generational shift in wealth coming up," Tom Nally,
TD Ameritrade Institutional's president, told Reuters recently. "We
want to make sure our advisers are ready to serve next-generation
investors."
But it could be a tough sell: Millennials tend to leave their
parents' advisers when they inherit money, and they are leery of
stocks. They "are the most conservative generation since the Great
Depression," reported a January UBS Wealth Management study, which
found millennials keeping 52 percent of their savings in cash,
compared to 23 percent for other generations.
To be sure, millennials are trying to save for homes, pay down
student loans and pay the bills that come along with young adult
lifestyles. But millennials tend to be distrustful of the
traditional financial planning industry, even when they have money
to invest.
"They don't want to hear a sales pitch," said Michael Liersch, head
of behavioral finance at Merrill Lynch, the brokerage unit of Bank
of America. Roughly 40 percent of millennials disagreed with the
statement "advisers have your best interests in mind," according to
a Wells Fargo & Co survey.
GIVING MILLENNIALS WHAT THEY WANT
To appeal to younger clients, regional brokerage Raymond James
Financial is training more new college graduates to be brokers. It
will "exponentially" expand its current level of 100 participants
over the next three to four years, Tash Elwyn, president of Raymond
James' private client group, said in an interview.
Morgan Stanley runs investment educational programs aimed at
clients' children who may someday need help managing inheritances.
It also beefed up its social-impact investing to appeal to
conscientious millennials, said Doug Ketterer, head of strategy and
client management for Morgan Stanley Wealth Management.
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Online broker TD Ameritrade runs TD Ameritrade U, an online program
that teaches college students investing strategies and how to use
the brokerage's thinkorswim trading platform. It also offers clients
recommendations from LikeFolio, a youth-friendly startup that
generates sample portfolios based on what's popular on Facebook and
Twitter.
"(These platforms) pique interest and expose millennials to
investing," said Nicole Sherrod, managing director of active trading
at TD Ameritrade. "It goes back to the 'invest in what you know'
concept."
That concept may be the one that wins over millennials like Kenny
Quick, a 25-year-old Tampa, Florida, advertising executive, who
bolsters his workplace retirement plan by skipping the advice and
buying shares of companies he knows through deep discounter
Scotttrade, Inc.
"I hold stock in Chipotle," Quick said. "I feel like I eat there all
the time, so investing in them felt like the next step."
(Reporting by Michael Leibel; Editing by Linda Stern and Cynthia
Osterman)
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2014 Reuters. All rights reserved. This material may not be
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