AssetMark On Millennial Investing: How To Get Younger Clients

(AssetMark) You’ve almost certainly been told that you need to bring in younger clients and adapt your service models to better fit the needs of Millennials and Gen Xers. (Gen Z is a touch young to be looking for financial advice). Maybe a speaker at a conference first put the thought in your head, or perhaps a colleague discussed a recent initiative at their practice for attracting younger clients. Everyone’s saying you need to do this — but do you really?

Depending on how long you intend to run your advisory practice, you’ll have to serve these clients at some point, simply because your current ones will age out. Millennials and Gen Xers will get to the point where they’re more actively looking for financial advice, and if you’re still practicing, you’ll be there to serve them.

Investable Assets By Generation

But if the question is whether you need to attract this generation right now, then there’s a bit more nuance to explore. Let’s dive in, find out what kind of advisor should be expanding their client base into this demographic, and discuss some actionable ways they can do so.

Are Millennials and Gen X Right for Your Practice and You?

You need to assess the kind of practice you run and what types of clients and services really energize you. Maybe these younger clients simply aren’t a good fit.

You might, for example, have lots of success helping clients in their 50s and 60s prepare for retirement. Maybe providing this service is something that you really enjoy, and perhaps you have a lot in common with these clients. 

In this circumstance, so long as you’re steadily replacing those clients that leave your practice, there’s no reason to get younger clients involved — especially if you have no idea how to attract them, don’t particularly enjoy working with them, and don’t really relish the sort of services they’re looking for.

On the other hand, you might be in a position where younger clients would deliver a real business benefit. For example, you might be trying to sell your practice. In this case, your potential buyer isn’t necessarily going to care that you prefer serving more elderly clients; they’re going to be interested in how likely your client base is to stick around with them in the long run. In this case, you’ll want to attract a cohort of younger investors to make your business more attractive to a potential buyer.

These are highly specific examples, and they are by no means an exhaustive list of circumstances that might make acquiring younger clients more or less appropriate. In reality, things will often be less clear-cut. The important takeaway here is that although industry thought leaders hammer home the idea that you need to attract younger clientele, you should only do so if it’s something that makes sense for your business and makes sense to you. It could very well be the case that it doesn’t. 

But if it does, then we can tell you what successful advisors do and don’t do when it comes to attracting younger investors.

What Are the Biggest Mistakes that Advisors Make When Trying to Work with Younger Generations?

They Assume Their Clients’ Children Are a Shoo-In

Your clients’ adult children seem like they’re almost certainly going to invest their assets with you once it’s time to do so. After all, you’ve done such a fantastic job with their parents, and maybe you’ve already met with them to discuss their parents’ retirement or estate planning, or just to say hi. Of course, they’ll sign up with you — right?

Not necessarily. The fact is that most of your clients, while satisfied with your services, aren’t gushing about you at the dinner table. And your clients’ children aren’t necessarily aware of the need for financial advisors. Or if they are, they may be more interested in using robo-advisors. While Millennial investing and financial planning is often taken care of by human advisors, about 20 percent prefer robo-advisors, a figure that grows larger the younger a client gets. Finally, even if they want a human financial advisor, the data suggests they still may select somebody other than you: only 13 percent of clients’ children have considered signing up with their parents’ advisor.

Robo-Advisor Adoption Rate by Generation

To win their business, advisors need to be proactive in reaching out to these contacts. They’re an excellent cohort of potential clients, but it’s incorrect to assume they’re an automatic win. Advisors can maximize their chances of winning their business by proactively communicating and adopting some of the strategies discussed throughout this article.

They Don’t Adapt

It doesn’t take a sociologist to see that there are some significant differences between how older generations and Gen Xers and Millennials interact with service providers and evaluate businesses. If your business is designed around attracting and retaining older clients in the Boomer or Greatest Generations, then you’ll necessarily have to adapt if you’re interested in doing the same for the younger generations.

Video calls are a great example of this. Most advisors have already made the transition regardless of their clients’ preference due to the COVID-19 pandemic. Now that many clients have been vaccinated, advisors may find that it’s easier to schedule a meeting with younger clients now that they’re offering an alternative to in-person meetings. These younger clients are in the gauntlet of life — they’re busy with their careers, starting families, buying homes, and more. They don’t necessarily have time to travel and sit down in your office, and they may be more comfortable speaking through video in the comfort of their own homes.

It’s not just video conferencing though. Younger generations expect to interact with each other and businesses digitally first and foremost. In fact, 62 percent of Millennials think that how you present yourself online is more important than how you present yourself in person, according to Squarespace research.

Investment Advice Needs by Generation

Thus, financial advisors looking to attract this audience need to update their website and provide a slick, modern feel to their digital brand. They need to deploy compelling digital tools, both on their website and during the delivery of their services. A digital client experience is no longer a differentiator for advisors if they’re interested in managing Millennial investing and Gen X investing — now it’s just table stakes.

They Aren’t Consistent

There are plenty of advisors out there that think attracting younger investors is essential. But they don’t always translate this priority into action effectively.

Often, it’s because their efforts are sporadic. They make one big push — perhaps a marketing campaign, a webinar, or maybe they set up some social media accounts — see some minor results, and then stop. If there’s any single bad practice common to advisors when it comes to marketing, it’s inconsistency. Slow and steady is the way to go.

What to Do Instead

Hire Someone in the Same Demographic

If you’re not used to working with Millennials and Gen Xers, then it might not be a bad idea to hire a junior advisor from that generation. This can be a win-win; junior advisors are looking to work with somebody with experience to serve as a mentor, and you’re looking to hire somebody with fresh ideas and insider knowledge on what matters most to Gen X and Millennial investing practices.

Change How You Deliver Your Service

Don’t be afraid to experiment with how you present and deliver your services to better meet the sort of experience that younger generations have come to expect. You could, for example:

  • Try a subscription-based model — Younger generations expect to pay a monthly subscription for Netflix, Spotify, and even their clothes and groceries. You could offer financial advising services for a monthly fee to match this expectation.
  • Offer simple DIY financial tools — You can provide calculators, miniature financial planning tools, and other simple, DIY financial advising tools on your website that potential leads can play around with to see what their financial plan might look like in practice. When they have questions, they’ll want to reach out to you. Wealth management platforms like MoneyGuidePro and others often provide these sorts of simple tools that you can integrate into your website.
  • Create educational content — Millennials and Gen Xers are digital natives, and they’re used to consulting online resources before making a purchasing decision. If you don’t offer educational material on your website, they’ll go elsewhere. What they find may or may not be accurate, and it may or may not help them reach the decision to work with you. If you do offer such content on your website, you can take control of the narrative and educate visitors on why they should work with you.

Stick to It!

Whatever your plan is for attracting this demographic of investors to your practice, the most important factor in its success is your consistency.

If you decide that you want to explore content marketing as a means of attracting younger advisors, set aside time once every two weeks or once a month to write a blog post. Then, be patient as you wait for results to trickle in.

If you decide to start using new digital tools to provide a better customer experience, make sure you actually use those tools regularly. Don’t expect new, younger clients to show up straight away; spend time positioning yourself as an advisor that provides compelling digital experiences.

Remember: If you’re going to try to market yourself and your practice to a new demographic, it’s better to spend an hour a week every week on outreach rather than to do so for an entire day sporadically.

Find an Accountability Partner

Of course, the best way to stick to your plan is to find somebody to check in with you, talk about your efforts with, and keep track of your progress. Even better, you can work with somebody that can provide support in executing your plan, in addition to making sure you stick with it.

Find an individual or an organization that can help you implement new digital tools and workflows, support your marketing efforts, or give you more time in your day by taking on back-office tasks like investment management.

At AssetMark, we help numerous advisors do just that — translate their strategies into action, accomplish their goals, and stay accountable to the plan they set out for themselves. If you’re considering expanding your client base into this new cohort of younger investors, then why not get in touch to discuss your plans?


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