Want to keep the inheritance in-house? Try a different approach

Gen Xers and Millennials don't want an adviser; they want a partner

Oct 31, 2013 @ 12:07 pm

By Liz Skinner

Financial advisers who want to keep managing the wealth their clients' children will inherit should be approaching those kids very differently than the way they appeal to their parents, a generational expert told advisers.

"Don't pitch Junior the same way you pitched his parents," Cam Marston, president of Generational Insights, said at the Fidelity Inside Track adviser conference in New York on Wednesday.

Baby boomers and those who are older value a firm's history and brand name, he said. They want face-to-face communications, and these clients should never be texted unless they have agreed to it ahead of time, he explained.

By contrast, clients who are 48 and younger were raised in a time of affluence — they focus on individuality and on how decisions and planning will affect their future, Mr. Marston said. Advisers don't need to describe their credentials because these individuals will walk through their doors having thoroughly researched the advisers and the firm online.

"Generation X spends an average of 16 hours researching cars before they buy one," Mr. Marston said.

Generation X, 34 to 48, and Millennials, also called Gen Y, who are 13 to 33, want an adviser who will teach them but not "tell them" what to do, he said. These generations don't trust promotions or advertising and they shun face-to-face discussions, seeking to communicate via short e-mails and texts.

"Present yourself as a partner," Mr. Marston recommends.

The nation's 85 million Millennials also "are younger than their age suggests," Mr. Marsten said. Essentially they are growing up later and advisers should subtract five to eight years from their ages when considering interactions with them. He says a Millennial at 29 today is like a baby boomer was at age 21.

He said Generations X and Y also value peer-to-peer recommendations and education more than anyone else. A new study released Wednesday by the American Institute of CPAs and the Ad Council confirms his conclusion. It found that 78% of individuals 25 to 34 gauge their friends' financial habits to determine their own.

"Many young adults are building financial foundations using the wrong blueprints," said Ernie Almonte, chairman of the AICPA National Financial Literacy Commission. "They need to make sure they're modeling the best behavior for their long-term financial stability."

Financial adviser Grant Rawdin, founder of Wescott Financial Advisory Group, said younger prospects and clients' children come to his office thinking they are fairly knowledgeable about investing "because they've talked to their peeps."

He tries to get them to come have coffee when he needs to better explain something, but they really want a quick text exchange instead, and ask, "Do we have to meet?"

Mr. Rawdin has his clients' children sign an engagement letter with him after they turn 21 to help these individuals "think of themselves as clients."


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