Ad­vice from grown-ups

A new plan to share life lessons with young adults

The Washington Post Sunday - - FRONT PAGE - BY JON­NELLE MARTE IN BOS­TON

On a Fri­day night at the supper club, they swirled, sniffed and sipped at least three kinds of wine while eat­ing lo­cal farmto-ta­ble fare: greens, maple glazed pulled chicken with spicy tomato and mini cho­co­late fudge cake with peanut but­ter sauce.

It looked like any other wine tast­ing in Brook­line, a wealthy sub­urb of Bos­ton. But in place of cheese, the wine was paired with tid­bits of fi­nan­cial ad­vice.

Som­me­lier Liz Vi­lardi spoke with the group equally about vin­tages and in­vest­ing. One diner asked how to open a re­tire­ment ac­count; another won­dered about the tax con­se­quences of a Roth IRA ver­sus a tra­di­tional IRA.

This wasn’t a room full of well-off in­vestors lis­ten­ing to a pitch from a wealth man­ager. Nearly ev­ery­one was un­der the age of 35. In the ranks: a wait­ress, a com­puter techie and a cou­ple of fash­ion blog­gers. Some of them had never laid eyes on a 401(k). Welcome to the So­ci­ety of Grownups. This un­usual busi­ness, open since Oc­to­ber, bills it­self as an out­let for young adults who want to take con­trol of their fi­nances but who might be in­tim­i­dated by the task. Or­ga­niz­ers here are bet­ting that young peo­ple ac­tu­ally want to talk about money even if they don’t have a lot of it. They’re also guess­ing that the lessons will go down eas­ier if they’re served with wine.

Cour­ses are meant to help peo­ple nav­i­gate even the less ob­vi­ous fi­nan­cial de­ci­sions: how to know when it’s time to change jobs; tips for plan­ning that dream va­ca­tion; ques­tions to ask be­forey­oumove in with a sig­nif­i­cant other.

They viewthese mil­len­ni­als as an in­de­pen­dent breed, who prob­a­bly wish to man­age their own money— but also need to know that they’re on the right track.

“They want to fig­ure things out on their own, but they want to have a lit­tle bit of a sound­ing board as well,” said Non­dini Naqui, chief ex­ec­u­tive and pres­i­dent of the So­ci­ety of Grownups, who at 35 is on the far edge of the gen­er­a­tion she is try­ing to reach.

The busi­ness model is or­ga­nized for a gen­er­a­tion that’s used to con­sum­ing a la carte (think, buy­ing one song at a time vs. the al­bum).

Cus­tomers can pay $20 for a 20-minute ses­sion — called a checkup — with a fi­nan­cial plan­ner who can help an­swer a ques­tion, say, about a 401(k) in­vest­ment, or $100 for a deeper dive that re­sults in a de­tailed to-do list for, say, im­prov­ing their bud­gets or clear­ing their debts.

That night last month, Stephanie La­belle, a 23-year-old wait­ress look­ing for a full-time job in fash­ion, barely touched her chicken pasta meal. She was too busy jot­ting notes as fi­nan­cial plan­ner Jena Pal­isoul ex­plained com­pound in­ter­est. She of­fered two sce­nar­ios: One per­son in­vests $15 a week — about the price of a bot­tle of wine— start­ing at age 25. Another puts off sav­ing un­til 35, but puts in $30 a week. Who comes out ahead?

With the power of com­pound in­ter­est, the 25-year-old will be able to af­ford a good bit more wine in re­tire­ment.

The les­son: Start early.

Reach­ing young in­vestors

It’s not un­usual to be young and broke. But for mil­len­ni­als, who came of age at the peak of the fi­nan­cial cri­sis and slug­gish eco­nomic re­cov­ery, break­ing out of that phase of­ten takes longer than it did for pre­vi­ous gen­er­a­tions. As they cope with mea­ger pay­checks and stu­dent-loan debt, they are push­ing ev­ery­thing back — mar­riage, chil­dren, home­own­er­ship.

The in­dus­try that would help at least some of them nav­i­gate these fi­nan­cial mile­stones has strug­gled to bring them in. Many fi­nan­cial ad­vi­sory firms won’t take on clients who don’t have hun­dreds of thou­sands — if not mil­lions — of dol­lars in the bank. Only 30 per­cent of fi­nan­cial ad­vis­ers tar­get peo­ple un­der age 40, ac­cord­ing to Cor­po­rate In­sight, a fi­nan­cial re­search firm.

Not that mil­len­ni­als are hold­ing their breath. Just 29 per­cent of peo­ple in their 20s and early 30s said they’ve re­ceived fi­nan­cial ad­vice from a pro­fes­sional, ac­cord­ing to a sur­vey by Mid­dle Ten­nessee State Univer­sity and iQuan­tifi, a fi­nan­cial plan­ning Web site. Most pre­fer help from a fam­ily mem­ber or friend.

As a group, though, mil­len­ni­als have con­sid­er­able fi­nan­cial clout: They spend $200 bil­lion a year, ac­cord­ing to es­ti­mates from the ad agency Barkley. That amount is pro­jected to grow as young peo­ple move up in their ca­reers, earn big­ger pay­checks and in­herit money from their boomer par­ents.

Re­al­iz­ing that po­ten­tial, more firms are find­ing ways to loop young peo­ple into a fi­nan­cial in­dus­try they­may not feel ready for — or even trust. Ear­lier this year, North­west­ern Mu­tual ac­quired Learn­Vest, an online plat­form that pairs peo­ple with fi­nan­cial ad­vis­ers. Online in­vest­ing ser­vices known as robo-ad­vis­ers, as Bet­ter­ment and Wealth­front, of­fer to man­age money for peo­ple who don’t need that hu­man touch.

Then there’s the So­ci­ety of Grownups. The com­pany is owned by Mass Mu­tual Life In­sur­ance Co., which more than two years ago started re­search­ing and de­vel­op­ing new ways to reach young in­vestors. The in­sur­ance com­pany sought help from Ideo, a de­sign firm that has sought in­no­va­tive so­lu­tions for a range of in­dus­tries, in­clud­ing ways to im­prove ed­u­ca­tion for im­mi­grants and ideas for chang­ing the ex­pe­ri­ence of dy­ing.

“Peo­ple want to get ad­vice in that may not have been avail­able to them in the past,” said Gareth Ross, a se­nior vice pres­i­dent at Mass Mu­tual.

The team went into the pro­ject ex­pect­ing to find that young peo­ple have some as­sets and ba­sic knowl­edge about fi­nan­cial prod­ucts.

“What we dis­cov­ered was peo­ple didn’t have a lot of those things and they didn’t know what to do about their fi­nances,” said Anna Engstrom, a se­nior de­signer and strate­gist at Ideo. “At that mo­ment, we re­al­ized this is a very dif­fer­ent op­por­tu­nity.”

To­gether, the firms con­cep­tu­al­ized the busi­ness model and de signed the workspace, which has the fa­mil­iar feel of a trendy cof­fee shop with brick walls, long sleek bars where peo­ple can grab cof­fee or a glass of wine while they wait to see a fi­nan­cial plan­ner and a meet­ing room for the plan­ners that feels like a friend’s cozy liv­ing room.

The slo­gan here, where one wall is ded­i­cated to por­traits of young peo­ple with beards or tat­toos who have their heads in their hands or their faces twisted to seem as though they’re on the verge of freak­ing out, is “Don’t panic.”

The fo­cus would have to be more ed­u­ca­tional than in the typ- ical fi­nan­cial ad­vi­sory busi­ness, Engstrom said, teach­ing peo­ple to think about ways money af­fects their lives — from ne­go­ti­at­ing a job of­fer to plan­ning an af­ford­able va­ca­tion.

These cus­tomers don’t just come in for guid­ance on as­set build­ing and port­fo­lio man­age­ment. The cen­ter doesn’t man­age money or sell in­vest­ments, and it runs in­de­pen­dently of its par­ent com­pany, MassMu­tual, said Naqui, who worked in con­sumer bank­ing and then at a non­profit or­ga­ni­za­tion be­fore join­ing the So­ci­ety of Grownups. (The goal isn’t to con­vert young peo­ple into in­sur­ance cus­tomers, she added.)

Classes touch on sub­jects be­yond the check­book to in­clude cook­ing lessons for peo­ple who are tired of eat­ing ce­real for din­ner and supper clubs for cou­ples who want to get bet­ter at talk­ing about their fi­nances. “There isn’t a place to open up about these is­sues,” Naqui said.

The a la carte menu of ser­vices is a soft sell to com­mit­ment­pho­bic mil­len­ni­als. But the team does want to build its so­ci­ety and hopes peo­ple will come back again and again as their fi­nan­cial lives evolve.

“We tried in ev­ery way to lower the bar­rier to en­try,” said Engstrom of Ideo.

Since open­ing its doors in the fall, the So­ci­ety of Grownups has held about 30 events a month, in­clud­ing chats, classes and larger public events with guest speak­ers. Some of the chats and classes sell out; oth­ers are can­celed be­cause not enough peo­ple sign up — push­ing lead­ers to find ways to teach those sub­jects in more en­gag­ing ways. The supper clubs are pop­u­lar, and more than 2,500 peo­ple have signed up for the weekly news­let­ter.

Ross wouldn’t say whether the com­pany is prof­itable yet, only that lead­ers be­lieve they’ve come up with a model that works and that they plan to build on. MassMu­tual is look­ing into open­ing lo­ca­tions in other cities. “What we’ve learned to­day is work­ing in­cred­i­bly well,” Ross said. “We ab­so­lutely are go­ing to ex­pand.”

One size does not fit all

La­belle, the server look­ing for a job in fash­ion, is ex­actly the type of per­son the so­ci­ety is aim­ing for. Af­ter grad­u­at­ing from Fram­ing­ham State Univer­sity in 2013, she moved back home to Maine to be closer to her mother, who was di­ag­nosed with can­cer. Last year, af­ter her mother en­tered re­mis­sion, she re­turned to the Bos­ton area to look for work and landed a six-month in­tern­ship re­view­ing and se­lect­ing ma­te­ri­als for the New Bal­ance shoe com­pany.

But now, roughly six months af­ter the in­tern­ship ended, she doesn’t want the time she’s spent work­ing in the res­tau­rant busi­ness to leave her at a disad­van­tage as she looks for a new job in Cal­i­for­nia.

“I don’t want them to un­der­value me,” said La­belle, who has been to three events at the So­ci­ety of Grownups, in­clud­ing a chat about ne­go­ti­at­ing pay. She ap­pre­ci­ates hear­ing ad­vice from a pro­fes­sional closer to her age. “They tell you what to say, they tell you what to ask for.”

Across from her at din­ner was Gre­gory Wong, a 26-year-old tele­com worker who asked about his 401(k) match. Some of the ad­vice that night was ba­sic, he said, but it was nice to hear it again: “It‘s a re­minder that I’m not sav­ing enough.”

But his girl­friend, Sa­man­tha Ly, presents a dif­fer­ent sort of chal­lenge. Some young peo­ple, even if they are just start­ing out, will want more — some­one to take con­trol for them.

“What would be more help­ful for me would be for some­one to hold my hand and do it for me,” said Ly, 27.

Naqui said the classes and ser­vices are best tai­lored for peo­ple who want to main­tain con­trol of their fi­nances but want to talk about whether they could be do­ing more — to im­prove their re­tire­ment sav­ings, boost their earn­ings po­ten­tial or just not screw it up when they move in with a sig­nif­i­cant other.

“We’re here to help peo­ple nav­i­gate adult­hood suc­cess­fully,” Naqui said. “There is some­thing very free­ing about the idea that ‘guess what, not ev­ery­body has this fig­ured out and put to­gether.’ ”

PHOTO BY MARVIN JOSEPH/THE WASHINGTON POST

PHOTOS BY JOSH REYNOLDS FOR THE WASHINGTON POST

TOP: From left, Kim Lyle, Floy­dMiller and Erik Al­mon work be­hind the counter in the lobby of the So­ci­ety of Grownups. LEFT: Non­dini Naqui, 35, the so­ci­ety’s pres­i­dent and chief ex­ec­u­tive, says her com­pany is “here to help peo­ple nav­i­gate adult­hood suc­cess­fully.”

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