Why millennials might need financial advisors after all

We talked to financial advisors about why millennials might be turning away from them.

Brian Carlton


Brian Carlton

Brian Carlton

Contributing Reporter

Brian Carlton is a contributing reporter at Policygenius who covers insurance and finance. His work has been featured in NPR, The Associated Press, and the BBC.

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Tuesday’s news hit hard. On Nov. 16, the price for Bitcoin crashed, wiping more than $200 billion from the cryptocurrency market. Other major cryptocurrencies also joined in, losing between 5% to 10% of their value. Cryptocurrency is a popular investment among millennials, as the Wall Street Journal recently reported. Rather than relying on financial advisors, rich young investors are making investing decisions on their own.

We talked to financial advisors about why millennials might be turning away from them, and why this generation might need professional financial help after all. 

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Millennials to financial advisors: Thank you, next

“I don’t blame my peers for saying ‘thank you, next’ to financial advisors,” says Sarah Jane Paulson. The Wisconsin resident and owner of Valkyrie Financial says the industry needs to change in some ways to remain relevant. “The industry has been horrifically slow to adapt its services for the millennial generation.”  

This is also the generation that grew up in a post-9/11 world, experiencing an economic crash, multiple wars, and now a pandemic. That affects the questions they have and what answers they’re looking for. 

“We’ve lived through major historical events and are just trying to survive in a world that looks nothing like what our parents experienced,” Paulson says. “I think it’s up to the industry to empathize with that and adapt.” 

Jason Dall’Acqua agrees. The president of Maryland-based Crest Wealth Advisors, Dall’Acqua points out it’s not just major events millennials are juggling. We’re seeing new technologies and new industries pop up at an impressive rate. That brings new investment opportunities and new questions. 

“Millennials face more challenges than perhaps any other generation, with higher debt burdens, a unique economic environment, increase in equity compensation, low interest rates, an inflated real estate market (and) new ways to invest,” Dall’Acqua says. 

But that doesn’t mean financial planning is obsolete. Instead, he argues, it’s more important than ever. 

How financial planners can help 

An evolving landscape doesn’t eliminate the need to ask questions, he says. It just changes what they are. Some clients need to know if cryptocurrency is a good investment. Others want to come up with a plan to buy a house, set aside money for retirement, and start preparing for their own kids to go to college. Investments are just one part of the puzzle. 

But where’s that advice coming from if not advisors? A July study from Credit Karma finds that 52% of Gen Z and 26% of millennials go to TikTok for financial information. Videos tagged #personalfinance on the app have been viewed billions of times. Meanwhile, the 11 million members of the wallstreetbets subreddit have inflated the value of stocks like Gamestop and AMC.

“If you go to five different platforms, you’ll find five different answers,” says Ethan Miller, a financial planner with Planning for Progress. “Someone might say, ‘Oh, I made a million dollars with this’, but there’s no way to fact check that. Did he really make money? Or is he just saying that?” 

Miller also points out that following internet trends is not a solid investment strategy. 

“By the time something’s hit the web, the money has been made,” Miller says. 

The Gamestop situation is one example. Members of one subreddit drove the stock price up to $500 per share from $17.25. But by the time the news hit websites and started trending, the price had already dropped again. Over the next three months, it became increasingly unstable, falling 34% one day, only to jump 53% within 24 hours. 

The concern, Miller said, is that if someone gets scared of missing out, they’ll rush to follow the trend and lose money. On the other hand, you have investors who did work with a planner. 

“They can say ‘I know what my strategy is and it doesn’t involve this,’” Miller says. 

A financial planner can help create a blueprint for hitting your  goals. They can help you stay focused on the long-term, rather than responding to the latest news.

“The clients I’m working with want to make sure they’re doing the right things now in their 30s and 40s,” Miller said. “That way, 10 years later, they don’t look back and say I wish I had done that differently.” 

Image: Joseph Won / Unsplash