• Women Financial Advisor Forum

The Two M Words: Money and Millennials

As millennials continue to enter the workforce, financial literacy and wealth management has become more important than ever.

I have spent more than 8 years now developing the concept of how to talk about finances—or as I phrase it, “The Money Talk.” Pursuing my mission of demystifying the taboo topic of money has involved appearing on my radio show in NYC on WOR and subsequently publishing books and articles and making public appearances—all designed to take the demons out of “The ‘M’ Word.

My focus has always been to help families have these tough conversations so they can successfully navigate life transitions and keep their money and family relationships intact. Part of my journey has been to uncover age and generational differences that are major factors in preventing families from successfully engaging in tough conversations and also impact the topics and type of conversation.

In an effort to continue to promote family money dialogue and financial literacy among family members, this will be the first of a series of blogs that will help further inform millennials as well as their parents and grandparents about not only the importance of having family money conversations but how to actually conduct them and strengthen the relationships along the way!

Lori Sackler, Morgan Stanley Wealth Management

Lori Sackler, Morgan Stanley Wealth Management

Each generation brings with it a unique set of experiences and values that inform their financial and life style decisions. Millennials are a different generation; they don’t view race, gender, sexual preferences, or marriage decisions as previous generations have, they are likely to explore on their own the many choice available through the almighty internet, and are more open to having difficult conversations that previous generations might have found awkward.

Having experienced 9/11 and two economic and market downturns during their formative years, the most recent the worst since the Great Depression, millennials experienced firsthand the impact these crises had on their families and their communities. So, it’s not hard to understand why they have a predictable lack of trust in institutions, and have to be convinced that the money approach of their parents and grandparents is relevant to them.

Their more cynical nature, in part a function of their absolute belief in the power of technology, manifests itself in their purchase of products where cost is a paramount factor and internet search for pricing is second nature. The same is true in their choice of Financial Advisors (robo or real), the type of money management vehicle they seek (with or without fees), and the type of relationship they are seeking with financial institutions which differs from what their parents and grandparents embraced.

My youngest millennial son is a perfect example for this blog series. When he graduated from college he went online, seeking the best money market rate available, independent of his Mom's role and offerings at Morgan Stanley. And guess what, it’s an online bank with no bricks or mortar.

This is the world of millennials; and after raising two and spending a considerable amount of (mostly, but not always joyful!) time with them, I know firsthand that they often need to be informed beyond the limited knowledge, experience and information accessed on the Internet. Baby Boomers and institutions in general need to make their arguments in bold and real terms that they can understand. They have to see the real value of paying a fee and working with an advisor, because personal relationships are initially less important to them.

You simply have to prove your worth in order for them to buy into your process, and I plan to continue to do that for my millennial clients. It starts with explaining what we do and how it is different than what they can get on the internet, and ends with showing them that we completely understand their dynamic needs for modern communication.

In my next blog in this series on financial literacy I’ll dive deeper into the complex world of risk and volatility. As more millennials start to manage their own money, they can overlook the years of experience that financial advisors have managing risk and volatility as part of the equation. The industry and the advisors clearly have to bring value add to justify their fees, and help them understand that risk is an element that needs to be considered. Financial literacy may not have been a course they received along their educational journey, which is why it’s so important to make sure that we speak to them in the right language.

Lori R Sackler is a financial advisor, Senior Vice President and Senior Investment Management Consultant at Morgan Stanley Wealth Management and author of the M Word: The Money Talk Every Family needs to Have about Wealth and Their Financial Future (McGraw-Hill Education, undated 2016) and the M Word Journal: How To Have the Money Talk (2016).

Lori R Sackler, CFP, CIMA
Senior Vice President, Senior Investment Management Consultant
Alternative Investment Director
2017 Forbes Magazine’s Top 200 Women Wealth Advisors