Marketing to Millennials

How advisers can adapt their approach and step up their game

by Tom Harris, CLU, ChFC, FLMI

My company recently conducted a national study on attitudes and behaviors of parents and grandparents, focusing specifically on how young adults plan for their expanding families. In evaluating the generational data, some interesting findings emerged. For example, 41% of millennial parents have planned for the specific season or month they wanted their baby to be born.

But it’s notable that this preference toward planning often doesn’t extend to their financial lives. Our study demonstrates that millennial parents are more likely to plan for lifestyle decisions, such as nursery décor or family vacations, than money matters, such as purchasing life insurance or saving for retirement.

Every generation encounters unique circumstances that inevitably impact financial behavior. Millennials have been subject to much higher tuition rates than previous generations, resulting in significantly greater levels of debt coming out of college. This has contributed to a delay of major life-oriented decisions, such as marriage, buying a house and having children. This domino effect continues, as those life elements are often the “triggering decisions” for young adults to create a long-term financial plan and consider incorporating solutions like life insurance.

For instance, the average age to get married in 1965 was 21 for women and 23 for men, while those figures now stand at 28 and 30, respectively. At the same time, millennials are about 8% less likely to purchase homes by the age of 34 than members of Generation X were. Additionally, in the last 45 years, the mean age of first-time moms has increased from 21 to 26.

Economic Impact

Millennials also endured the financial crisis of 2007 and resulting Great Recession at a relatively young age. In some cases, they saw their parents experience significant hardship through job loss or delayed retirement. Understandably, this experience has made many millennials cautious about financial decisions, fearful of market downturns and skeptical about advisers.

Another factor impacting millennial financial choices is their tendency to prefer “experiences” over more tangible items. While baby boomers and Gen Xers have traditionally placed great value and social status on buying homes or cars, millennials demonstrate a stronger inclination toward apartment renting and spending their spare cash on entertainment or adventure.

However, since our study shows that millennial parents are planners, we believe this propensity can be channeled toward financial fundamentals with the help of an understanding adviser. So how can advisers encourage millennials to focus more on financial planning?

Adviser Assistance

First, help parents of young children understand that financial planning encompasses both protection and accumulation components. Products that offer versatility, like whole life insurance, can present a perfect solution. A whole life policy provides protection in the event of an untimely death, while allowing for long-term asset accumulation that parents can use for future needs like retirement, estate planning or a child’s college tuition.

Our research shows that while 93% of baby boomers are aware whole life insurance accumulates cash value, that percentage is significantly lower (69%) among millennials. Given their young age, good health and preference for planning, millennials are in a prime position to build strong financial plans by purchasing whole life policies.

Tech and Trust

Another important point to remember is that millennials have been raised as digital natives. They’re used to high-level technology in all of their interactions, from social media to banking and product purchases. But while millennials are tech-savvy, they still would like to work with a professional who they trust. According to Alexandra Cole, co-founder of Purpose Generation, a millennial-focused marketing agency, “Most millennials want a hybrid — they don’t want just technology and they don’t want just human advisers.”

The key for advisers is to offer convenient tech as well as a knowledgeable human perspective that provides comfort, authenticity and transparency. Millennials want to know they’re getting all the information they need from a trustworthy person. It’s up to advisers to truly listen as they go through the discovery process with millennials and be transparent about why they recommend a certain product, design or structure versus other options.

Millennials will check out your LinkedIn page before they ever meet you. Even if you’ve been referred to them by a friend, they’ll conduct due diligence on you as well as any recommendations you make. So as an adviser, you really need to step up your game. That includes emphasizing technology, having a strong online presence and ensuring you’re as authentic as possible in face-to-face interactions.

Exceptional Experience

We know that millennials also value a personalized experience, so avoid making blanket recommendations that generally apply to any growing American family. Tailor your recommendations to the specific client and their unique needs and concerns.

Several years ago, Penn Mutual conducted a study with Drexel University that asked students about their impressions of life insurance products and marketing. The feedback we received was characterized by a general distrust of large corporations. But what made that perception so fascinating was how many of the students were holding cups of Starbucks coffee while offering their responses.

When asked why they spent money at Starbucks even though it’s one of the biggest corporations in the country, they said Starbucks was different because the experience felt authentic and personalized. That’s an important message for all advisers to heed.

Future Focus

If we look ahead 10-15 years, I believe millennials will find the same value that previous generations have found in life insurance, both in terms of living benefits and death protection. The triggering events will just happen later for them than they have for baby boomers or Gen Xers. Millennials will also likely have a longer average life expectancy than any generation that came before them, so they have more time to recognize the benefits of purchasing life insurance.

It’s important that advisers recognize how to market toward this demographic, and provide the experience millennials are looking for. Instead of telling them what you can do for them, understand what their concerns are and discuss how you can reach solutions together, on their time table and at their convenience. Make it clear you’re there to help as they research and analyze which steps they should take for their particular needs. Recognize that millennials don’t want to feel pressured into making a decision. Demonstrate your value and provide education, emphasizing that you understand every person, family and set of decisions is different.

I have faith that advisers and millennials will make great plans and choices together. There are excellent life insurance products available to address a variety of needs, and there has never been more flexibility provided by the investment offerings. The time frame may be different than it was for previous generations, but the opportunity remains, as long as advisers adapt their approach based on an enhanced understanding of this audience. ◊