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Distinct differences exist in the way millennial advisors andtheir older counterparts employ technology and the types oftechnology they favor, according to Nationwide AdvisorySolutions' fifth annual AdvisorAuthority study, released Monday.

Twenty-nine percent of millennial advisors said adding newtechnology was the most important thing they would do over the next12 months to bolster their practice's profitability, compared with11 percent  of baby boomer advisors who saidthis.

In addition, 20 percent of millennialadvisors, but only 3 percent of boomers, saidconsolidating existing technology was most important to enhanceprofitability.

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"As the first digital natives, millennials have spent theirentire lives with instant online access to almost everything,giving them a distinct advantage when it comes to leveraging newtechnology to stay a step ahead," CraigHawley, head of Nationwide's annuity distribution, said in astatement.

Even so, the two groups can learn from each other, Hawleysaid.

"Just as boomers can take a page from millennials' playbook, byadopting AI, robo and other technology, millennials can follow thelead of more experienced advisors, by not losing sight of the humanconnection, building strong one-on-one relationships and workingwith their clients' family and children to build a more profitablepractice."

The Harris Poll conducted an online survey within the U.S. fromFeb. 15 to March 4 among 1,021 financial advisors and 824investors.

Asked which solutions they were most interested in integratinginto their practice over the next 12 months, millennial advisorswere much likelier than boomers to choose the following:

• Mobile websites and/or mobile apps: 48 vs23 percent
• Tools for risk management, risk monitoring and portfolio stresstesting: 46 percent vs 33 percent
• Interactive websites and/or client portals: 40 percentvs 23 percent
• Artificial Intelligence: 34 percent vs17 percent
• Robo advisors: 22 percent vs 11 percent

Next-generation clientele

Millennials and boomers in the survey differed on the importanceof using technology to enhance profitability, but both agreed thatadding new clients was the number one way to do so.

For 36 percent of millennial advisors, the chief factorfor enhancing profitability was adding new clients, followed byadding new technology, 29 percent, and targetinghigh-net-worth clients, 28 percent.

In contrast, 55 percent of boomers said the best routeto profitability was adding new clients, 30 percent saidit was adding a younger generation of clients and28 percent said it was attracting and retaining clients'heirs.

Eighty-five percent of millennial advisors reported that theyhad a strategy to retain clients' heirs, compared with64 percent of boomer advisors, and 71 percent ofmillennials said they had changed their marketing strategy toattract a next generation of investors, versus 38 percentof boomers. These younger advisors are also more likely to usetechnology to help drive client acquisition in their pursuit ofgreater profitability.

To attract the next generation of investors, millennial advisorswere somewhat likelier than boomer advisors to increase their useof mobile technology, more than three times more likely to makeenhancements to current websites and/or client portals, more thantwice as likely to offer robust cyber security procedures and morethan twice as likely to leverage robo-advisors or other digitalportfolio allocation tools.

Millennials were also somewhat likelier than boomers to increasetheir use of social media to attract the next generation ofinvestors.

Alternatively, to attract the next generation of investors,boomer advisors were far more likely than millennial ones to workmore with a client's family and children and to focus on theiryears of experience. They were also somewhat likelier to focus onpersonalized advice for a holistic financial picture.

The survey found that among factors that may lead to thisdigital divide on client acquisition was that millennials andboomers differed on which generation of investor would be theirprimary target in the next 12 months.

Fifty-one percent of millennial advisors said they were mostlikely to target fellow millennial investors, 26 percentsaid Gen-X investors, 10 percent Gen Z and9 percent boomers. For their part, 47 percent ofboomer advisors said they were likeliest to target fellow boomers,33 percent Gen X, 12 percent millennials and amere 1 percent Gen Z.

Gaining client insights

About a third each of millennial and boomer advisors agreed thatthe main way technology would help them better serve clients overthe next 12 months was understanding clients' current needs andbehaviors.

However, 29 percent of millennials said technologyhelped them deliver better service by analyzing and understandingclients' expectations, compared with 19 percent of boomerswho said this. Likewise, 29 percent of millennials and23 percent of boomers cited protecting clients' assetsagainst market risk, 26 percent vs 18 percentproviding more personalized holistic planning and24 percent vs 17 percent predicting the impact ofinvesting decisions.

Twenty-one percent of millennials but only 9 percent ofboomers said they used technology to engineer investing strategiesfor better returns. Alternatively, 38 percent of boomersvs 26 percent of millennials said the top way technologyhelped them provide better service was to free up time to focus onone-on-one relationships with clients.

Two generational differences were most prominent whenmillennials and boomers were asked which tech-enabled solutionswould help them to better support clients' needs over the next 12months.

Millennial advisors were more than four times likelier thanboomer advisors to use artificial intelligence and/or dataanalytics to understand client behavior. And while12 percent of millennials said they used robo advisors toprovide better service, only 1 percent of boomersdid this.

Millennial and boomer advisors exhibited more similaritiesaround other types of technology to better support clients'needs.

They agreed that the number-one solution was financial planningsoftware, were equally likely to use budgeting and cash managementtools and were closely aligned around tools for risk management,risk monitoring and portfolio stress testing and tax optimizationtools.

Millennials were somewhat likelier than boomers to supportclients' needs with mobile websites and/or mobile apps, cybersecurity and real-time data alerts, but were somewhat less likelythan boomers to use retirement accumulation tools and retirementincome distribution planning tools.

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