"Millennipreneur" may sound like an obscure word that no one outside the Scripps National Spelling Bee cares about, but savvy wealth managers know it's so much more. Even if the coinage "millennipreneur" has you scratching your head, the phrase "you know one when you see one" has never been more appropriate.
Millennipreneurs are the 35-and-under professionals that you see in airports, coffee shops, any mobile place -- working on their laptops with earbuds in their ears, tablet computers at their sides and sporting wearable devices like Apple watches. If they're talking on their cell phones, it's likely to long-distance contacts in a major business center such as New York, London, Beijing or Hong Kong. Thinking internationally comes naturally to millennipreneurs, as does multi-tasking.
BNP Paribas Wealth Management uses this term "millennipreneurs" to refer to millennials (young adults born after 1980) who have chosen to forego the typical corporate ladder and instead have become a major force in start-up businesses. In fact, nearly 60 percent of millennials consider themselves entrepreneurs, according to Entrepreneur magazine, citing a report from Rasmussen College.
Wealth managers can't afford to ignore millennials, even though the generation is wary of the financial services industry, thanks to the stock market rollercoaster ride that they witnessed in their early adulthood. BNP Paribas dedicated some of its 2016 Global Entrepreneur Report to millennipreneurs, shedding much-needed light on this group. I recently chatted with Steve Prostano, head of Family Wealth Advisors for the BNP Paribas Bank subsidiary West Wealth Management, about millenipreneurs and how high-net-worth-focused (HNW-focused) financial services firms can attract them as clients.
April Rudin: What made the BNP Paribas Wealth Management decide to study millennipreneurs and what can we learn from this report?
Steve Prostano: Everyone has been struggling with this millennial generation to find out how exactly they want to be served. We know they value transparency, technology and convenience. But there's a lot we don't know. If you want to build a relationship with this group, you need to know what they value so that you can align with those values at an early stage. Given all of the unknowns, this kind of research helps financial services companies understand them better so they can serve them better.
April: Were there any findings in the 2016 BNP Paribas Global Entrepreneur Report that you think would be especially useful for wealth management firms that want to cater to millennipreneurs?
Steve: In the U.S., these millennial entrepreneurs are slightly older when they're starting their first businesses than in other parts of the world. I think it was close to 35 here. That's a change from the late '90s. During the technology boom, you had a lot of people pursuing their dreams in their dorm rooms. But today it's different.
These days, kids can study entrepreneurialism in college. It has become a normal part of college curriculums, so entrepreneurialism has become more professionalized. It's almost a more traditional business approach to entrepreneurship. They're waiting until they're ready to launch a real business; they're a bit more sophisticated. This means financial services firms can expect many of them to speak the language of entrepreneurship and to have a well-developed understanding of what kinds of services they need.
The report also revealed that almost half of millennials based in the U.S. sought advice from professionals when starting up their own business. This is great news for financial services firms. It's a good starting point. They're pretty bullish, too. A full 88 percent of millennials expect an increase in profits over the coming 12 months. That means now may be a good time to approach them and talk to them about how to ensure they can make the most of those profits. They're feeling optimistic about their business prospects.
Understanding these subtleties is the priority if you're going to serve these clients over their lifetime and address not just the business side of their wealth -- their commercial banking needs and business banking needs -- but also their personal wealth. Throughout the life cycle of a business, these two things often become intertwined and there's an opportunity to take a look at it from a holistic perspective.
April: BNP Paribas has a few interesting offerings for millennials. Can you tell me about them and why they appeal to this generation? What is the takeaway for other firms that want to connect with millennials?
Steve: Well, BNP Paribas Wealth Management has a premium mobile social network for millennials called the Next Gen Club. They get access to exclusive educational content, based on their interests and discussions with opinion leaders. It also provides them with access to financial or privileged lifestyle events. Then, there's the networking aspect. They connect with their peers from around the world. And we allow them to connect with experts. They're also allowed to promote their own success and things of that nature and share moments in their life, whether it's business-related or personal. It's a community that was developed through annual Next Gen retreats.
I think the takeaway here is that you want to not only provide discrete financial services to this group, but to also broaden their horizons and help them build community. These are things that this particular group really cherishes, and it's something they probably can't get elsewhere -- a social network of like-minded entrepreneurs.
The Next Gen program retreat itself is something BNP Paribas has been offering for years. It happened to be once a year in Paris and once a year in Hong Kong, but the invitations are to global families, so U.S. participants have also been invited. Millennial clients, and baby boomers as well, really love these gatherings because they love to be part of the community and they love to collaborate. The principle here is the same. Community is important to everyone, but it's especially important to the millennials. If you can offer them ways to build community, they will keep coming back.
Millennials will be with us for many decades more, so now is the time to get to know them. Start those relationships early and you will grow with them over their lifetimes. It's a bold generation, which makes them exciting to work with. I see great potential for financial services firms to partner with these millennipreneurs and help them shape the future of business.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.