The Young Shall Lead
Here’s a different client acquisition sequence: Step 1. Attract Generation X and Generation Y clients. Step 2. Reach their baby boomer parents.
Step 1. Attract Generation X and Generation Y clients. Step 2. Reach their baby boomer parents.
WHILE FINANCIAL ADVISORS SCRAMBLE TO ATTRACT millennials, our firm is trying a different approach: We’re forming strong relationships with our youngest clients to ultimately reach their baby boomer parents.
This client acquisition strategy has been long in the works and was informed by my own experience navigating my early days in the financial services industry.
When I was a trainee in my 20s at a large wirehouse, I had to abide by certain household minimums for engaging new clients. During my time there, I was frequently frustrated by the asset minimum requirement, as it often excluded younger investors.
In fact, my age-group peers did not always meet that requirement — but they were still reaching out to me for advice and investment management. Many of these friends were young professionals who had great future earnings and wealth potential.
A NEW MODEL
When I joined my partner at our current firm in 2009, these experiences prompted us to create a business model that accommodated lower assets per household and provided advice and guidance for younger clients.
Several years ago, our firm was referred to a young couple with two small children who needed financial planning services, college savings tools, a couple of small rollovers and life insurance. At this point in their lives, their savings were mostly in the wife’s corporate retirement plan.
It was an easy process, and I was delighted to provide advice for an investor my age. As a busy young professional with children myself, I appreciate being able to outsource anything that is not in my area of expertise, so that I can focus time on my family and work. My Gen X and Y peers are no different. We continue to strive to create an easy, engaging client experience and to provide them advice as they make life transitions.
A few months after we began working with the young couple, I received an email from the wife. Her parents were moving to the area to be closer to their grandchildren, and they were looking for a local advisor. She was adamant that her parents meet with us and consider our firm.
This was an aha moment for me: Gen X and Gen Y have baby boomer parents. And many of them are newly relocated retirees in the market for a new advisor. For the last several years, we’ve continued to see the same pattern repeating over and over again. Gen X and Y children are bringing their parents, and sometimes even their grandparents, to us as clients.
CHILDREN FIRST, PARENTS NEXT
In building multigenerational practices, we as advisors are constantly being told to go for the next generation. This message is true — after all, millennials are expected to inherit $30 trillion of U.S. wealth. But it also overlooks the opportunity to create relationships with the older generations, by gaining their children as clients first.
Attracting Gen X and Gen Y clients will not be accomplished simply by adding a robo option to your website: Gen
X and Gen Y are sophisticated consumers. We also find them to be loyal, trusting and grateful for good advice and customer service.
And don’t be fooled, these generations do have assets and a need for sound financial advice as they make big life transitions, both personally and professionally.
LIFE CHANGES FOR PARENTS
These clients are also seeing their parents experience major life changes such as retiring, relocating, downsizing and dealing with health challenges and long-term care concerns, just to name a few.
Gen X and Y clients have an influential voice with their parents, who will soon need help managing their financial affairs. Asking clients probing questions about their parents’ financial plans can create an opportunity for a referral.
In many cases, the two generations want to work together with the same firm, but they may find it difficult to identify an advisor that both parties want to work with.
ACHIEVING A BALANCE
I’ve come to realize that achieving this balance is easier than it seems. While millennials may be more technologysavvy than their parents, both generations are looking for the same thing: genuine advice from a relatable and trustworthy professional who pays close mind to their financial goals, needs and desires.
Millennials aren’t the elusive white whale that the financial advice industry has made them out to be. In fact, they’re just looking for the same faceto-face advice that previous generations have appreciated.
Advisors are fully capable of providing that excellent advice to Gen X and Y clients, and should harness those relationships to go upstream and reach the older generation.
Nina O’neal is an investment advisor and partner at Archer Investment Management in Raleigh, North Carolina. She focuses on planning for high-income professionals, women and business owners. Follow her on Twitter at @noneal510.