Rich Millennials Are Rejecting Financial Advisers It’s Easy to Manage $1 Million Yourself

It’s an up-and-coming trend that rich millennials like to handle their own money instead of hiring a financial adviser. Because why pay someone to handle your money when you can do it!

This is the case for many millennials including the startup owner of SwagUp Michael Martocci. He is a wealthy 26-year-old based in Miami taking care of all his money.

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SwagUp, Martocci’s company creates and distributes branded items such as tote bags, which accounts for the majority of his wealth. He invests 90% of his money in cryptocurrency while managing hundreds of thousands of dollars in investments.

It’s simple to manage $500,000 or $1 million on your own, Martocci told the newspaper, The Wallstreet Journal, in a report published Monday. He also added that he spends less than an hour per week monitoring his investments.

According to research firm Aite-Novarica Group, which analyzed Federal Reserve data, roughly 70% of households with a net worth of $500,000 or more and led by a person under 45 years old had an investing style that was either strongly or mostly self-directed in 2019. This was an increase from 57 percent in 2010.

The 26-year-old is in charge of his wealth management just like another majority of wealthy millennials. He is the perfect example to highlight a trend among wealthy millennials to manage their own money rather than relying on traditional financial advisers.

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He has stated that has no desire to play golf with a Goldman Sachs Group Inc. adviser who wants him as a client. He went on to state in the interview how he dodged such golf meetups several times.

Where Are Rich Millennials Investing These Days?

Rich Millenials these days prefer risky investments that could potentially double or triple their money over those that offer market-type returns. Martocci, a Robinhood user, is like many other young investors who believe that low-cost, do-it-yourself digital platforms can provide investment guidance.

Furthermore, many people want to invest in riskier assets such as cryptocurrencies and tech startups that aren’t offered by traditional financial advisors.

With the price of bitcoin, ether, and other digital assets skyrocketing, the cryptocurrency market has become increasingly appealing to investors. The market surpassed $3 trillion in valuation for the first time on Monday, as ether reached new highs due to a higher token burn rate and new money flowing into the market.

Rich millennials

Meanwhile, Martocci has stated that if he receives a windfall from the sale of SwagUp, he will seek the advice of a financial advisor. But until then, he would like to handle his finances himself.

Another example is Travis Chambers, a 33-year-old who ended up getting a $9 million windfall as a result of selling a part of his advertising agency. He thought of opting for a financial adviser and interviewed four virtually for the job. But, none of them could catch his attention.

According to him, they all put in hardly any effort to show him how they stood out from others and why he should hire them. So, he decided to take care of his money by himself. He invested $1 million into a hedge fund which was run by his business partner’s neighbor.

He invested another $1.5 million to get Airbnb rentals in built-in low-income areas. Also, he made an investment in Utah that involves building futuristic huts.

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Although he did mention how U.S. Bancorp is trying to attract him by offering him a 2.75% interest rate. On a condition that he invests $1 million in their brokerage account. Chambers is thinking of going for this offer. But, he has stated that he would still take care of most of his money himself investing in things that attracted him such as cryptocurrency and real estate.

What Are Financial Advisors Doing to Attract Millennials?

Financial advisers do realize that they need to find ways to attract the newer generation. According to them, they do more than just put a client’s money into bonds or stocks. They help their clients plan out financial goals and reach them. They help them from making irrational decisions that would affect their assets in the long run. Moreover, they can also handle their client’s taxes. 

Some huge wealth management firms are relying on these millennials to get old before having them as clients.

Jed Finn, chief operating officer of Morgan Stanley Wealth Management and head of corporate and institutional solutions told, “When you start to go from the wealth accumulation phase to the retirement phase, the world gets much more complicated.”

According to him at this time, these Millenials will turn to financial advisers who will be ready to take care of things for them.

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Additionally, firms are also trying out the latest technology to attract young clients. According to Merrill, they have gotten people under the age of 45 to become clients and make an overall 20% of new clients this year.

This has increased from the 10% of new younger clients they got five years back. This has all been achieved by improving technology and hiring a variety of financial advisers.

It seems like for now, rich millennials want to figure out things for themselves. And wealth management firms have to come up with a lot of new plans to attract them into trusting them.


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