YOLO is a term Sungan Jung of Seoul, South Korea, has heard often from his millennial-aged clients in the last couple of years. The acronym stands for “You only live once” — meaning the focus should be on the here and now. It is a motto common to many who work with 20-something clients.

“They don’t have jobs — or security if they have a job. Real estate prices are rising more rapidly than their income,” said Jung, a seven-year MDRT member. “There is no future in their planning. Instead, they work hard for a year and then use the money to go on holiday in the U.S. or the U.K.”
 

Pew Research describes millennials as people between the ages of 20 and 36. Many in this generation are looking for immediate fulfillment and experiences, rather than working toward long-term financial goals. The children raised during the Great Recession don’t have the confidence their parents had in a healthy financial future — instead they’ve witnessed their parents lose their jobs and their assets in the financial downturn. They don’t trust people, and aren’t quick to turn over information to an advisor they’ve never met before. They’re often socially conscious, hungry for information and open-minded, but they also lack belief that a healthy financial future is in the cards for them.
 

  "I can earn more by targeting a larger number of millennials."
— Sungan Jung
 

Yet Jung, like many advisors around the world, refuses to give up on this generation, which is a formidable portion of the workforce in most countries. Millennials make up the bulk of his client base, and he has found it profitable to work with this demographic because, while their assets may be limited, they tend to make decisions quickly.

“Instead of targeting high-net-worth individuals, who take ages to make decisions, I can earn more by targeting a larger number of millennials,” he said.

“It’s not that they don’t actually have dreams; they just forget about it for a while,” he said. “We start with short-term and mid-term asset management for now, and I bring up their dreams and hopes for the future for long-term planning.”
 

Ysabel Victoria Obediencia Benitez of the Philippines agrees it can be difficult to convince millennials to plan for the future, but she thinks advisors need to face that challenge head on. “The population is getting younger in the Philippines. The majority of the population is young and entering the workforce,” said Benitez, a four-year MDRT member from Makati. “It’s critical to take care of millennials. They’re the future of the Philippines.”

Because she knows this generation isn’t interested in retirement planning and is looking for tangible results, Benitez repositions her products.

“We talk about something they’re passionate about, not retirement,” she said. “I ask, ‘Do you plan to stay in the same job forever? Let’s build a resignation fund or a freedom fund that gives you a ticket out.’”

Opportunities and challenges
“Millennials are going to continue to dominate the workplace,” said Aaron L. Hammer, LUTCF, a 10-year MDRT member from St. Cloud, Minnesota, during a presentation at the 2016 Annual Meeting. “As they enter their peak earning years, it’s important that we’re able to communicate with them and work with them.”

Hammer sees both challenges and opportunities for this generation. Many have unmanageable student debt, which makes it difficult for them to handle day-to-day expenses such as rent, health insurance and their cell phone bills. Some are forced to live with or receive support from their parents.

But there are also opportunities:

• They’re very eager for information. “They want financial and life insurance advice. Even before they have serious financial assets, you need to start building a strong financial foundation with them,” Hammer said. “It might not be prosperous to work with them now, but in the future it might be.”
• They stand to inherit trillions from their boomer parents.
• Right now, they control more in annual spending than any other generation.

To take advantage of these opportunities, advisors need to communicate with millennials in the ways they want to communicate. Most won’t answer the phone, but if you text, they’ll get back to you right away. Social media, as long as it stays within the bounds of compliance, is another way to communicate with millennials.

“That’s where they’re looking: blogs, videos, talking to friends,” Hammer said. “You need to have an interactive website with blogs and videos and a way to communicate back and forth. It might be text, it might be Snapchat, it might be email — although email is going out of favor with millennials. You need to figure out how they want to be contacted and then deliver that, because once you get in with one, you’re probably going to be able to penetrate their friend group.”

When meeting with a millennial, start with the basics, Hammer said. Begin with something as easy as a budget. At the end of the month, they might have some extra money in their accounts.

“Show them the way some of that money can be used for retirement or an experience. They’re all about experiences. Talk about what kind of experience they can have if you can help them save $20 or $40 per month to get to their goal.”

Tomorrow's millionaires
Laura Cervantes, a three-year MDRT member from Chiluca, Mexico, spent time working with a branding firm to better understand the millennial generation and adapt her processes.

“All my efforts are focused on making smart strategies for this generation based on everything we know about their lifestyles,” she said. “In the case of millennials, we find dreamers, willing to do anything to fulfill their dreams, who believe pampering is the next luxury. They like to be inspired and enjoy life and, above all, they love themselves.

“For me, a savings instrument is the best way to love yourself. Tributing yourself with a percentage of what you generate gives you a life full of possibilities. That’s how I approach my clients,” Cervantes said.

When millennial clients enter the workforce, Cervantes creates flexible plans that help make saving money a habit. “As their income increases, so will their contributions and dreams,” she said. “An important issue for them is that they perfectly understand how their investments work, so I support their purchasing decisions through social media by publishing infographics, images and tips that explain the wonders of financial freedom.”

For example, Cervantes began working with a 28-year-old client two years ago. The client was working at a consulting firm and started with the minimum contribution. Recently, he started his own business. “The savings in his plan haven’t been used, and he has additional contributions that are increasing month by month, so next year he plans to get a second plan to reinforce the capitalization of his business.

“Knowing the millennials’ market favors my approach; it also helps me increase the number of clients,” she said. And it pays off in the long run. “They are the millionaires of tomorrow.”