Date: November 9, 2015

Financial Advisors, to Connect With Millennials and Women Investors, Don’t Assume Anything!

Let’s face facts: this country has a massive retirement savings problem. A large part of that is due to the surprising lack of financial literacy across the nation. And we can’t assume it’s just those without assets or education who are not financially literate.  Per the Chicago Federal Reserve report entitled Financial Literacy and The Effectiveness of Financial Education and Counseling: A Review of the Literature:   “ A large proportion of consumers are not financially literate, even among the wealthiest and most educated population segments.” Whatever the cause, the net result is that most people don’t understand the basics of finances and investing.

So the good news is, there are a lot of people out there that need and want your help.

The bad news is, they may be too mortified about it to even talk to you!

People don’t want to feel stupid, and studies show that feeling is exactly what prevents many from seeking help. A September 2014 study by TradeKing Advisors found that fear of being judged keeps people from consulting with advisors. The study shows that most people are embarrassed to share their limited financial knowledge as well as details about their current financial situation. It’s not just a small percentage either; the survey found 3 out of 4 Millennials said that the prospect of talking to a potential advisor has stopped them from investing altogether. There’s a widespread fear of looking dumb by revealing how little they really know about money and investing.

So what can advisors do to break the ice and appear more approachable

  1. Share your own learning curve with money. To be seen as more approachable, be sure to share your own fumbles with money. Ideally, something so important that it motivated you to study it professionally. Most Millennials want their financial advisors to act more like a coach. Think about it this way:  no one wants to get tutored by the math genius who never had a hard time with algebra, and no one wants the naturally thin, cheeseburger- eater who rarely works out as their fitness trainer.  We all naturally connect with and are inspired by those who have experienced the same struggle we have and risen above it.
  1. Share the stories of famous financial experts’ mistakes. We’ve all felt stupid at times, and that’s never fun. What can quickly take that feeling away is to show that even those who are admired worldwide in finance have made mistakes just like us regular folks. The story of Ben Bernanke not being able to refinance his house is a good one. Or you can use the example of Long Term Capital Management, as we do in our educational programs. Even with two Nobel Prize winners and 16 finance PhDs on staff, they still managed to lose billions of their investors’ dollars. Sharing stories such as these can help newer investors feel better about their own money mistakes, which helps them open up and begin taking action.
  1. Lose the Jargon. This one requires some practice. Most of us in the industry naturally use financial lingo as “shorthand,” but it’s vital for us to realize that most of the population does not know, for example, the difference between an ETF and a mutual fund. Or, they may think they know what these terms mean, but it’s not a proper understanding, which can create problems down the road. So we really can’t assume anything. We need to keep the conversations basic, use simple analogies, and constantly ask if we are explaining it in a way that they can understand it. To help get in the mindset, sit down with a medical journal for an hour.  
  1. Put aside the “Expert” Persona. Yes, this may have worked with past generations, but with today’s younger investors and women investors, a great bio isn’t going to make the sale.  The statistics on heirs changing advisors shows that credentials aren’t what people are looking for these days.  Instead, focus on making clients feel comfortable, learning about their goals and obstacles and just share your expertise if and when they ask.  And on a similar note, it’s good to always remind people that they aren’t expected to know everything unless they do this for a living, or unless they want to.  Really, they just need the big picture.  That’s where your expertise really does count, to take care of all the details on for them.  But you’ve got to be able to communicate with them first.

These tips are good places to start. Then, double check:

Does your website welcome newer investors, or does it just spout off credentials, accomplishments and dry facts?  Do your postings on social media make you seem easy to talk to or like more of the unapproachable “expert”?

As advisors start to build their practices to welcome more young people and more women, keeping these concerns in mind will help you better connect with these groups.  This may also help these investors feel better about themselves in the process, which in turn can lead to more new clients for your firm.

To learn more about Jeanne Klimowski, visit


Susan Bishop