Theories abound, but one constantly cited element is their collective experience from the 2008 Great Recession.

Further, millennials are the most indebted generation in history, carrying significant student loan debt as they enter the workforce. With these factors in mind, it's not difficult to understand their more conservative approach to finances.

Below is a snapshot of what the world looked like when each of the five generations currently existing in the workforce were between the ages of eight and 22 years old:

Millennial views have been shaped by political, global and cultural events. (Image: Kevin Boyles)

The rapid pace of political, global and cultural events unfolding for millennials leaps out immediately. Add in the massive explosion in internet, technology, smart devices and social networks, and there is a reasonable foundation for understanding why most millennials are radically different in their perceptions than prior generations.

Now look at what the Dow Jones Industrial Average did during each corresponding year:

(Source: Macrotrends LLC, “Dow Jones 100 Year Historical Chart”)

Since 2000, the millennial mindset around money — everything from saving it to taking out loans — has been shaped by unprecedented changes in the global economy.

Millennials have a variety of concerns about saving for retirement, and often they miss out on tax-preferred savings vehicles like Roth IRAs. (Photo: istock)

Addressing millennials' savings concerns

A Wells Fargo study found that 42% of surveyed millennials say that debt is their largest financial concern — and they are making strategic moves to avoid it. The percentage of millennials who already own traditional and Roth IRAs is roughly the same as the national average for all households at more than 40%.

According to the Investment Company Institute (ICI), 20% of all Roth IRAs are now owned by millennials. Such significant participation rates show a generation exhibiting a high level of savings awareness.

But there is some bad news, as well.

Millennials tend to shun professional financial advice and trust financial professionals and institutions much less than prior generations did. As a result, Wells Fargo found they tend to rely on advice from peers and family as opposed to professional sources.

Millennials being more willing to save money than prior generations is certainly the “glass is half full” piece of the equation. Doubtless, not much additional analysis or color needs to be added to this fact — millennials are motivated to save.

The issues on the “glass is half empty” side of the equation abound but are certainly not insurmountable. In order to overcome these trust issues, advisors and those in the financial services industry need to consider a different approach and a completely new way of thinking.

Three issues to address

In order for financial experts to tackle millennials' savings concerns, it's important to understand the concerns they are facing in their battle to save.

The first is the erroneous belief that retirement is the only obstacle on the mind of the millennial saver. In fact, millennials are beset and besieged by the competing savings priorities prior generations were simply not taught to incorporate into their saving plans. Things such as paying off college debt, assisting elderly parents outliving their own savings, college saving for their kids and saving for health care needs, both prior to and in retirement, are vying for their attention.

Advisors need to recognize this and approach their savings goals with the understanding that retirement is not millennial's main priority, and in fact there are many needs taking precedent over it.

The second issue is millennials are very entrepreneurial, so the idea that employer plans are a one-size-fits-all solution is not quite right. The percentage to total number of independent workers in the millennial generation is higher than in any other. Some studies show millennial independents as already making up 30% of the independent workforce.

Getting millennials who do have access to employer-sponsored plans to better leverage their advantages is still a great approach, but it needs to be a component of a larger strategy instead of the sole one.

Lastly, a large number of millennials are eschewing saving anything for retirement directly, preferring to put their often relatively meager available savings dollars into cash equivalents, or what is often referred to as “rainy day funds.” This robs them of the opportunity to save in tax-preferred 401(k) or IRA retirement vehicles. As a result, many are not realizing the potential benefits of their generational penchant for saving money.

At a minimum, advisors should teach these young savers to invest their “rainy day” dollars into Roth IRAs instead of dumping them into savings accounts. This way, they can still have access to their contribution dollars at any point should an immediate financial need presents itself. By opening these Roths sooner rather than later, millennials also start the five-year Roth clock, so the sooner these young savers put a few dollars in, the sooner they can realize the full benefit of the Roth IRA.

Closing the gap

While millennials are philosophically ahead of the curve on saving for retirement, they need more guidance than any prior generation. They are paying down debt from a number of sources, so their available saving dollars are often somewhat small, and only the most forward thinking financial professionals are willing to speak to them before they accumulate enough assets.

Building trust with millennials and helping channel their desire to save is the key to building long-term relationships. They are the largest generation in history, and the opportunity for advisors recognize this first is potentially massive.