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What Younger Clients Want Isn't Too Difficult

By Grace Williams September 6, 2017

As the saying goes, everything must come to an end. In the financial space nothing signifies this quite like the ebb of baby boomer investors being replaced by the slow creep of Gen X and millennials who are beginning to consider seeking financial advice. As an increasing number of Gen Xers and millennials begin to see the importance of hiring a professional, if you want to cater to them as an advisor, you might want to consider implementing a fresh, updated process.

This year’s installment of the Global X’s “Beyond Baby Boomers” survey sheds light on this quite abundantly. Released earlier this summer the survey, commissioned by the Global X ETF, found that 64% of millennials and 48% of Gen Xers plan to allocate more of their assets to advisors over the next decade. This is not surprising given what’s become fondly known as the “largest generational wealth transfer yet.” But for the experienced advisor looking to work with the younger set, figuring out generational sweet spots can prove challenging.

Nina O’Neal is a partner and advisor at Raleigh, N.C.’s Archer Investment Management. A millenial herself, her firm has $50 million under management. Fully aware of the bad rap and stereotypes older generations foist on hers, she says younger clients are an untapped resource. O’Neal knows her clients want more than someone to simply handle their investments. “They’re planning for the future -- they don’t want someone looking in the rearview mirror and at their [own] retirement,” says O’Neal in an interview with FA-IQ. Older advisors might not be “looking at that life because they’re too far away from it.”

First off, even if you’re staring down the twilight of your career it doesn’t have to be painful to “get with the times.” Regardless of age, proper communication gives you incredible traction. The survey found that 78% of Gen Xers and 71% of millennials prefer to interact with their advisors at least quarterly, or more frequently. But the secret here is figuring out how clients prefer to be contacted as well as how often.

Jay Wells, an advisor at Foresight Management in Draper, Utah, finds that rather than a phone call or in-person chat, many of his younger clients prefer everything via email.

“When we try and reach out to chat with clients we get turned down all the time,” says Wells, whose firm has $261 million under management. “I’ve learned not to take it personally. They’re too busy to sit and take a meeting.”

If you're considering becoming more tech-savvy to appeal to younger demographics you're in extremely good company. Don’t be surprised if clients want you to offer services through an app, kick out a Snap or send a tweet or two. According to the survey 93% of millennials and 71% of Gen X investors said they would work with a tech-savvy advisor, while 66% of both groups expect your website to be easy to navigate.

But being accessible and tech-savvy are only part of the equation. Given current news cycles and the political environment, investor anxiety about the security of their investments isn’t entirely unfounded. Knowing their advisor can protect their investments was extremely or very important to 87% of millennials. Meanwhile, for Gen X, financial education came in as the most important advisor offering, with 76% noting it as extremely or very important. Moreover, according to the survey, 85% of millennials and 57% of Gen Xers said the election of Donald Trump impacted their likelihood to work with an advisor.

Theodore E. Saade, senior partner at Los Angeles’s Signature Estate & Investment Advisors, says in an interview with FA-IQ that for his client base, political concern is multigenerational.

“With the overall population, there seems to be this idea of potential market volatility,” says Saade, whose firm has $6.8 billion under management. After “the election, people wanted to seek advice and needed handholding with the current administration.”

In response to any investor worry, Saade’s firm has frank conversations with clients about their “golden” objectives and how to stay on that path regardless of headlines and market activity.

While optimal communication, tech-savviness and reassurance in uncertain times are three elements that work well with younger clients, O’Neal believes meeting them at their level is what truly seals the deal. Young clients are juggling homes, starting families and out and about living their lives. Understanding this is a potential bonus point bonanza.

“We hear this a lot: ‘I don’t want to work with my dad’s guy, I’m looking for a younger, more forward-thinking person,’” says O’Neal.