In Practice September 26, 2014

Study Finds Some Millennials Are Eager for Advice

Some subsets of Millennial investors are just as likely as their parents to seek professional financial advice, according to new research from Phoenix Marketing International.
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The similarity in advice-seeking behavior between Baby Boomer parents and Millennial children is especially prevalent at the upper-end of the income scale, the study suggests. Phoenix says the research is drawn from the Phoenix Global Wealth Monitor tracking program and divides the U.S. affluent and high-net-worth investors into 12 segments, based on their intended level of investment activity. The most active segment is a group of young investors Phoenix calls the Active Wealth Millennials.

David Thompson, managing director of Phoenix’s affluent market business, tells PLANADVISER that there are somewhere in the ballpark of 3 million affluent and financially active Millennials—many of whom are interested in professional financial advice. He says the research shows that about 72% of Active Wealth Millennials currently get professional advice, just slightly higher than affluent Baby Boomers (at 70%).

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The similarity in adviser usage ends there, Thompson says, as Millennial investor needs and expectations for professional advice differ dramatically from their parents.

“Our new data clearly shows that Millennial investors are highly active, smart and tech savvy, and clearly not wary of financial advice, as they realize they lack investment expertise,” Thompson says. “However, unlike older investors, Millennials are seeking advisory models that include not only the human factor, but also the tools, automation, and online education that will enable them to handle some of their wealth management needs themselves.”

As further proof the generational differences in approach towards financial advice, 40% of Millennial investors describe their advice orientation as “selective,” versus only 21% of Baby Boomers.

“All of our data shows this is an underserved market right now,” Thompson says of affluent Millennials. “A lot of retirement specialist advisers don’t pay very much attention to the younger investing segments—they figure this group just doesn’t have the assets and substantive wealth to desire advice, especially since retirement is so far away.”

Yet, Thomspon says that affluent Millennials present a compelling opportunity for advisers to win new clients. “Most of these affluent Millennial households have yet to really build a strong relationship with the advisers they’re already using,” he explains, “so that’s another important point to keep in mind. They are likely to be looking for new sources of guidance.”

More on Phoenix Marketing International research, including information on an upcoming webinar discussing affluent Millennial investors, is available here.

Deals & People September 26, 2014

AllianceBernstein Expands Defined Contribution Team

Investment management firm AllianceBernstein L.P. announced three new hires to its defined contribution team.
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Mark Brown has joined the firm as managing director for defined contribution (DC) products, a role in which he is responsible for supporting defined contribution business development activities through the firm’s institutional sales force. Franchesca Maddalena joined the firm as vice president and defined contribution marketing director, responsible for DC distribution marketing efforts. Heather Balley will join the firm as vice president and DC participant communications director, responsible for all plan participant communications regarding products and retirement readiness.

Brown will report to Richard Davies, senior managing director of defined contribution and co-head of the firm’s North America institutional business. Davies rejoined AllianceBernstein in December 2013 and helped to develop custom target-date solutions during his previous 16 years at the firm. In his new role, Brown will focus on supporting the firm’s generalist institutional client advisers in their defined contribution business development activities, as well as in their efforts to provide additional investment services to existing DC clients.

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Brown joins AllianceBernstein from Goldman Sachs Asset Management (GSAM), where he was a vice president and institutional defined contribution strategist responsible for leading the institutional sales initiative for GSAM’s DC business.

Maddalena reports to Jennifer DeLong, senior vice president of multi-asset product management, and is responsible for developing and implementing marketing plans for the firm’s defined contribution products and services, as well as creating product marketing materials that support sales efforts.

Maddalena joins AllianceBernstein from PIMCO, where she was vice president of distribution marketing for the firm’s global wealth management unit and responsible for leading development and implementation of marketing plans that aligned with internal business objectives.

Balley will also report to Jennifer DeLong and is responsible for creating educational material for plan participants about how to achieve their retirement goals in alignment with the firm’s sales and marketing initiatives. Balley also joins from PIMCO, where she was vice president, marketing, for the global wealth management division. Her experience includes creating marketing plans for the EMEA region and a full suite of investment educational materials for the investor/participant audience.

Davies says AllianceBernstein has been building out its suite of target-date products to adapt to the changing retirement investing landscape—most recently with the launch of multi-manager funds that offer the independent selection of funds from multiple investment managers in one portfolio.

Additional information about AllianceBernstein is available here.

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