All We Need is Some Education

By Brook Ptacek, IAC Student Intern

In my last blog post, I hit on how millennial investors prefer some face-to-face action when it comes to investing. In the study, Uncertain Futures: 7 Myths About Millennials and Investing, sponsored by FINRA and the CFA Institute, some of the top factors identified as holding back millennials from investing was debt or a lack of savings.  What was interesting was that money was not the only factor holding back millennial investors, but so was education.

The study showed that not all millennials feel confident in investing. Rather, they would want a financial adviser who could educate them on investing. According to FINRA and CFA Institute, this debunked the myth that “millennials, being overconfident in general, are also overconfident in their financial lives,” and the myth that “millennials are wary of the financial services industry and by extension skeptical of financial professionals.”

In fact, what the research showed was that millennials, across all segments surveyed, have “positive views of financial professionals.” For the millennials surveyed already using financial advisers, 46% identified that they were satisfied with their adviser.  And, according to the same study, for those millennials surveyed without financial advisers, only 15% cited the reason for not using a financial adviser was for a lack of trust.

Rather, what the study showed was that “millennials want a financial professional who is more a teacher than a friend.” The study notes that millennial investors “look for collaboration with their financial professionals” and that to build trust with millennials as a financial adviser, all you have to do is take the time to educate them. Indeed, as FINRA and the CFA Institute’s study recorded, the lowest factor in building trust was having the financial adviser getting to know the millennial investor as a person.