Advisers should be using digital technology to engage Millennials now, with a view to “harvesting” them when their wealth reaches a level that makes them fit for face-to-face advice, a panel has heard.
Speaking at a session about engaging Millennials in super at the Financial Services Council (FSC) Leaders Summit in Sydney on Tuesday, GROW Super co-founder and director Mathew Keeley said advisers tend not to pay attention to Millennials because it is not commercially viable to service clients with small balances.
However, given the likelihood that their wealth will grow through both time in the workforce and intergenerational wealth transfer, Keeley proposed letting digital offerings target Millennials in their youth, with the intention that advisers will later take on those clients when they have more complex needs.
“From an adviser’s perspective, they just can’t service a Millennial, there’s just not enough money there, it’s not commercial,” he said.
Keeley said his fund had been exploring the proposition of priming younger members to engage with super early, with a view to passing them over to advisers later on.
The panel heard trust is a problem for the Millennial generation, with more consumers trusting their peers than institutions. A poll conducted on the day found three-quarters of Millennials valued advice from family or friends over that given by governments and institutions.
Rocky Scopelliti, Telstra global industry executive, banking, finance and insurance, said digital advice had the potential to improve engagement with the generation.
“There’s a huge appetite for digital advice because digital advice is much more engaging, much more consistent than human-delivered advice, particularly for this demographic,” he said. “That’s why 1 in 3 of them have an appetite for it.”