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Adapt or die: Attracting Gen X and Gen Y clients

Generations X and Y are about to accumulate millions of dollars on their own and inherit trillions from their parents. These families will need advisers. Are you prepared to serve them?

Oct 29, 2013 @ 8:33 am

By Robert Sofia

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Having been born in 1981, I belong to Gen Y. I'm also an investment adviser representative and a consultant to 950 financial professionals. Because of where I fit in personally, the conversation about what the next generation wants from advisory relationships intrigues me.

In most respects, I believe my generation wants the same things our predecessors want: sound advice for a reasonable price, accessibility, communication, transparency. In other respects, though, I must acknowledge that Generations X and Y each display distinct traits that advisers should understand and adapt to if they plan to be in business 20 years from now.

Here are a few reasons why, according to Cam Marsten's “The Gen-Savvy Financial Advisor”:

*Generation X and Millennial investors will inherit more than $41 trillion by 2052.

*Surveys show that 86% of inheritors do not plan to use their parents' financial advisers.

*29% of wealthy investors are under age 50 and control 37% of investible assets.

Many advisers have built their business models around serving baby boomer retirees and pre-retirees — a strategy that has made sense for a long time, and will likely continue to make sense for a time.

Even now, the landscape of boomer wealth is changing rapidly as increasing numbers are reaching retirement age and beginning to draw down their retirement assets. Furthermore, as boomers die, it is unlikely that their heirs will invest their inheritance with their parent's advisers — unless these advisers provide services that match their expectations.

Approaches that work with older clients actually can alienate younger clients and prospects who may view them as dated or out-of-touch. For this reason, it's critical not to be overly attached to traditional methods of doing business. Here are some tips that will help you connect with younger investors.


Think of what recent generations have grown up with. Enron, WorldCom, Madoff, Stanford — they've had front-row seats to a rash of financial scandals and complex investment schemes that have left them with a distrust of the financial services industry. Rather than trying to "sell" investments, the financial adviser's role should be that of a facilitator and provider of advice; more teammate than coach. Be 100% transparent and upfront about every commission, fee and charge. If Gen X or Gen Y investors feel that you or your firm isn't leveling with them on costs or performance, they'll go elsewhere.

Bear in mind that younger investors also are avid “Googlers,” meaning they will likely go online to research you and your advice, and to seek out performance and fee comparisons. Work hard to earn their respect by sharing as much information and research as you can to give them the “inside track.”


Gen X and Gen Y spend staggering amounts of time online and are devoted social media users. Research suggests that they may be less likely to work with a financial professional who doesn't have a significant footprint on the web. An updated and mobile-friendly website, blog and social media presence are vital to building credibility with younger investors.

Research also shows that Gen Y investors reach out to friends and family first when seeking financial guidance. This means you should provide references or examples of how you have helped their family, friends or acquaintances where possible.


Again, you have to think about what Generations X and Y are accustomed to: Loads of positive reinforcement, "You're special. You're unique. Be an individual." Video games with new prizes and rewards at every level. Sporting events where everyone gets a trophy. This conditioning means you will have more success by helping them set highly personalized short-term, medium-term, and long-term goals.

As they reach each goal, encourage them to bask in their success and reward themselves. When retirement is still a long way off, focusing on it as the ultimate goal may not be as motivating as say, hitting the $100,000 mark in a Roth IRA or paying off a home mortgage.


Younger investors may not want to be courted the way older investors do and may be put off by traditional client events such as dinners or golf outings. On the other hand, sporting events or beer tastings might find a willing audience. Consider replacing the traditional seminar with online video or webinars. Offer research reports and white papers for download on your website, and use the contact information you capture to follow up personally when someone expresses an interest.


It's common for Gen X (and especially Gen Y) to have many demands on their time and short attention spans. Keep pitches and discussions short and send them home with information to consider.


This is one area we can't overemphasize. Gen X and Gen Y investors are using technology for nearly everything, and they expect the companies they do business with to be the same. They use a wide variety of online and mobile applications to manage their finances, share information and track investments. Applications like Mint and Personal Capital are growing increasingly popular, with members of Generation X among leading users. If your firm doesn't offer comparable tools or at least integration with existing ones, you could find yourself in a difficult position down the road.

According to a Spectrem Group survey, 58% of millionaires aged 35 and younger would be willing to use webcam technology to speak to their advisers. This means that programs like Skype, FaceTime, and GoogleChat could replace an old-fashioned phone call for many of your clients in the future.

How comfortable are you with using this technology?


Younger investors don't necessarily want or need a lot of face time with their advisers. They are adept users of e-mail and social media and often prefer these modes of communication. As much as possible, ask for their personal preferences and try to oblige them.

In conclusion, if you're already experiencing success as an adviser, I can understand why you may view the recommendations in this article with fear or skepticism. And frankly, depending on your circumstances, you may be able to continue growing and thriving without making adjustments. That being said, I urge you to remember two things: First, your baby boomer clients are aging. Their wealth is going to gradually transfer to their heirs. It's good business to build relationships with your client's children on terms that will earn their respect and loyalty. Second, over the next 30 years, Generations X and Y are going to accumulate millions of dollars on their own and inherit trillions from their parents. These families will need advisers. Will you be prepared to serve them? By making a few adjustments to your business model, you can ensure your practice will stand the test of time.

What do you think? Are you working with Gen Y clients? What are some of the critical differences between young clients and boomers? What are you doing to reach them? Join the discussion below

Robert Sofia is the COO and co-founder of Platinum Advisor Strategies, a web-based marketing and consulting firm to financial advisors nationwide. For more information on Platinum Advisor Strategies visit


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