A few days ago I was at a conference about today’s investor. Of course, everyone there wanted to talk about young investors. Of course, all the young investors were not at the conference. That’s how conferences work. I paid attention and wrote down 11 important short phrases. I then wrote my notes in prose form. That's what you see below:
The millennial investor is not interested in your experience with her. She’s interested in her experience with you. If she chooses to. The millennial investor is not marinating her thoughts in a brew of famous brands and names and iconic institutions. EF Hutton and Smith Barney mean less than WealthFront and Betterment. Don’t even mention Ellevest. The Mount Rushmore of meaningful investment and banking brands is being carved daily online.
The millennial investor did not grow up studying to be a doctor and believing that only experts should be allowed to build portfolios. No, the modern millennial feels that she has insight into what companies are hot and which are not—as much as you do! And she may be right. Research is what it’s all about. The millennial investor has no trouble peeking under the hood of every company in your proposed portfolio — and even under the hood of the competitors in the category. She knows how to read a balance sheet and she has a strong instinct for efficiencies when it comes to making financial decisions.
Can she see all of her financial assets in one frame? Yes she can. That’s good because the millennial investor is not going to sit by the mailbox and wait for her statement. In fact, the modern investor is online whenever and wherever she chooses to be. At five in the morning, at five in the evening. At 2:45 a.m. And the cost basis of her portfolio? It’s right there. Online in the portfolio details.
The modern millennial investor does her own research and has her own portfolio ideas but in the end, she’s a huge advocate of index investing. Or ETFs. She might not see a great deal of distinction between the two. But, when she invests, she is a tad cynical about active investing. She thinks machines and models do a pretty good job.
When the modern millennial investor likes what she gets in her portfolio; when she likes what she learns about tax management and efficient investment strategies; when she likes the values expressed by the portfolio: she is the first to broadcast her approval. She is enthusiastic and vocal about her pleasure with the process, with the quality of the experience. She is a convert to the cause.
Yes, I used the 11 short phrases in the write-up. I did. The art of investing is still an art. It’s still a work of beauty to navigate the topography of markets and spikes and dips and sell-offs and run-ups. Today we know a lot more about to whom we proffer advice, for whom we manage assets and develop wealth strategies. In the case of our youngest investors, it’s on us to embrace the new paradigms that define their generation, where authority figures mean less and transparency is expected, where big brands are diminished but brand loyalty is fervent. It’s on us to be open to their viewpoint. The millennial investor knows her mind, and perhaps she can inspire us to learn more about ours, too.