6 Challenges For Advisors Working with Gen Y
May 6, 2013 12:07 PM
6 Challenges For Advisors Working with Generation Y
Gen Y clients may be the next frontier for financial planning, but their low investable assets and risky retention rate arent all advisors should be thinking about.
Here are 6 challenges for advisors to take note of when working with this generation.
For the full story on working with Gen Y,click here.
Here are 6 challenges for advisors to take note of when working with this generation.
For the full story on working with Gen Y,
<b>1. Theyre More Demanding Upfront, Because They Have More Information Upfront </b>
Gen Y tends to be more fee- sensitive and conscious, because of how much information they have at their fingertips, says Ted Jenkins, co-founder of oXYGen Financial in Alpharetta, Georgia. We have to act more like advisors than product salesmen to work with this group. Most brokers didnt build their books on 1 million dollar books they started with their clients early on, and grew with them.
On a cautionary note, Jenkins observes that while Gen Y has access to more information than there ever was, there is fallacy of information to contend with, as clients often dont question the source.
Its one of the biggest challenges to change their preconception, thats for sure, says Jenkins.
On a cautionary note, Jenkins observes that while Gen Y has access to more information than there ever was, there is fallacy of information to contend with, as clients often dont question the source.
Its one of the biggest challenges to change their preconception, thats for sure, says Jenkins.
<b>2. Having the Infrastructure and Technology </b>
United Capitals Dallas office eschews mahogany desks for glass tables in a bright, colorful workplace that suggests a technology firm rather than a traditional planning practice. While clients are waiting in the lobby or conference rooms, iPads are provided for their use.
When clients meet their advisors, theyre equipped with either a 55-inch monitor/tv, or an 80-inch touch screen where they can follow step-by-step their advisors online actions, as well as self-manipulate their plans all in the name of making the planning process more interactive.
We structured our firm to be able to handle clients like this, says Brandon Moss, managing director of United Capital. Its a real challenge for smaller firms, because of the hefty overhead that Gen Y requires. But advisors have to be totally committed, and they have to invest in the technology.
When clients meet their advisors, theyre equipped with either a 55-inch monitor/tv, or an 80-inch touch screen where they can follow step-by-step their advisors online actions, as well as self-manipulate their plans all in the name of making the planning process more interactive.
We structured our firm to be able to handle clients like this, says Brandon Moss, managing director of United Capital. Its a real challenge for smaller firms, because of the hefty overhead that Gen Y requires. But advisors have to be totally committed, and they have to invest in the technology.
<b>3. Communicating in Their Language </b>
A gray beard behind a big mahogany desk at a stodgy firm doesn't just scare these clients it turns them off instantly, says Brandon Moss, managing director of United Capital. They expect collaborative and engaging conversations to be centered around their entire financial life. Just as their life is connected through their various social media and technology aspects, they expect their financial lives to be just as intertwined, with everything being considered in concert, not in silos.
<b>4. Engaging With Them Differently </b>
Gen Y expects a very unique and self-designed experience and advisors have to be able to provide that, says Brandon Moss, managing director of United Capital. They are used to working in fun, interactive and transparent environments - why should our process be any different?
Mosss firm uses an interactive process where they give clients control over the various trade-offs in the design of their own financial plan to reach their goals. Theyve also developed specific online tools and mediums to meet these clients where they live, which is mostly online.
For example, one of their platforms Our Money Mind Analyzer and Honest Conversations® exercises (www.honestconversations.com) are specifically geared towards engaging clients and helping them have better understanding and meaning around their money decisions.
These clients are so used to engaging and working online that you have to have the tools and ability to meet them there, says Moss.
Mosss firm uses an interactive process where they give clients control over the various trade-offs in the design of their own financial plan to reach their goals. Theyve also developed specific online tools and mediums to meet these clients where they live, which is mostly online.
For example, one of their platforms Our Money Mind Analyzer and Honest Conversations® exercises (www.honestconversations.com) are specifically geared towards engaging clients and helping them have better understanding and meaning around their money decisions.
These clients are so used to engaging and working online that you have to have the tools and ability to meet them there, says Moss.
<b>5. They Expect Value for Every Dollar They Spend</b>
This doesn't mean they are cheap, but it does mean that they expect the same service, technology and experience that they get at say the Apple Store as they do from their adviser, says Brandon Moss, managing director of United Capital. This becomes very difficult for many firms to provide, particularly those that are not used to working with this generation.
<b>6. Most Firms Use the Retirees Approach </b>
It's a completely different paradigm for these younger clients, says Brandon Moss, managing director of United Capital. The issues are different. It's moving from job to job and even having multiple income streams. It's getting a nanny vs. daycare. It's paying for private elementary school while still taking a really awesome family vacation. Retirement isn't really front and center with these clients yet. You can't use the same process you would with say a 60 year old with only a couple of years to retirement.
