From the Editor
There has been a lot of talk in our industry about how advisors may want to
target younger generations of clients—Generations X and Y, also known as the
millennials, to be specific.
Some advisors are skeptical of the opportunity, and on the surface they may be right. These younger investors, in
many cases, don’t have the investable assets that advisors’ more mature baby-boomer clients have. But they will.
Most Gen Xers are well into their 40s. And although you may hear the term
millennial
and think of some preteen
who never looks up from her iPhone, the oldest members of this generation are actually in their early 30s. They have
careers, families, mortgages, and student loan debt. They need life insurance, and estate planning, and investment
planning. Most important, they need the assistance of a trusted financial advisor who can guide them to the decisions
appropriate for their circumstances. In fact, according to a recent study by global consulting firm Accenture, “millennials
are the most driven among the generations to build and pass along wealth, and the most interested in investment strategy.”
As your baby-boomer clients retire and draw down their assets—and your
profit margin—how will you fill the gap and help ensure the continued
success of your business? The answer lies with the younger generations.
And this issue of the
Commonwealth Business Review
is full of resources and
ideas to help you attract and retain these new clients.
Because much of their potential net worth is tied up in human, rather than
financial, capital, young investors often do not receive the same level of
attention from financial advisors as their more senior counterparts. But advisors looking to support the long-term
health of their businesses would do well to help inexperienced clients overcome their unique challenges. “Longevity
and the Power of Compounding Make Younger Investors a Unique Opportunity” (p. 19) offers food for thought for
advisors seeking to determine an ideal asset allocation for a younger demographic.
The idea of targeting the next generation isn’t limited to adding new clients to your book. It also involves finding new
financial advisors to help ensure the continuity of your business. Due to a lack of formal training programs at wirehouses,
the pool of young, well-trained advisors ready to take over a business is diminishing. “The Power of Mentorship: A Spotlight
on the Junior/Senior Advisor Intensive Program” (p. 39) explores our in-house program, launched in 2013, that is designed
to serve the interests of tenured advisors seeking to develop younger associates, as well as help those junior advisors
realize their potential.
And there’s another potential benefit to developing that younger generation of financial advisors. Did you know that
millennials make up just 6 percent of Commonwealth advisors’ clients? In “Marketing to the Millennials: A Junior Advisor’s
Game?” (p. 35), find out how bringing a junior advisor on board could help you gain a greater share of these younger
investors while planning for succession and the long-term legacy of your practice. Plus, get valuable tips for marketing
to Gen Y prospects.
Reaching and developing relationships with younger investors isn’t likely to happen overnight. As Accenture’s study
reminds us, the financial crisis created a lot of distrust for the financial industry, particularly among millennial investors.
But by taking advantage of the tools available to you—including Commonwealth technology, social media, and your
own younger staffers—you will be well on your way to meeting millennials where they want to be met.
If you have questions, comments, or ideas for future stories, I’d love to hear from you. Please e-mail me your thoughts
at
Kate Flood is the editor of the CBR. She is available at x9606 or at
.
Be sure to check out our online
exclusives (highlighted on p. 4)
for additional valuable content
from our subject matter experts.
Leave Your Perceptions (and Misconceptions) at the Door
KATE FLOOD
