Four-Corner Marketing
36
For Advisor Use Only
March/April
2014
The dilemma many advisor practices face is twofold—and it
happens that the solution to how to gain your share of the
millennial market (and protect your profit margin) and plan
for the succession of your business may be perfectly aligned.
Consider Bringing on a Junior Advisor
Bringing a junior advisor into your firm—one who’s
younger in both age and experience—may offer you the
best of both worlds: (1) a way to extend the legacy of
your practice and ensure that your clients continue to
receive the guidance they’ve come to expect long after
you’ve retired, and (2) a way to target younger investors.
This begins to make more sense when you consider:
1.
Millennials as a group tend to seek peer approval
and validation.
Their penchant for social media is
proof of that! For this reason, they’re likely to work
with professionals closer to them in age, who they
feel may share these same values (and who can deliver
that peer perspective). That doesn’t mean a young
investor can’t or won’t work with an older advisor,
but youth can be an advantage here, especially if
you’re used to working with boomer clients who
prefer to delegate their financial matters and aren’t
necessarily seeking “approval.”
2.
Delegating the work of acquiring and managing
younger clients can free you up
to continue focusing
on your top client relationships. Shortly, I’ll outline
some of the marketing strategies for the millennial
audience, and it may become clear why having
someone else do that work will be more effective.
3.
Junior advisors can carve out a separate billing/fee
structure as they build their book of younger clients
,
likely using retainer-like or hourly fees through
Commonwealth’s Wealth Management Consulting
program instead of AUM fees. This style of billing
works well with the younger generation because they
usually don’t have a large enough asset base to enter
into a fee-based asset management arrangement.
Keep in mind: hiring a junior advisor isn’t the solution for
everyone, but it could be the start of a fruitful relationship for
both of you. As the junior advisor becomes more entrenched
in the business, he or she could indeed become a viable
successor to take over your business and clients.
Be sure to analyze your business, your goals, and the pros
and cons before jumping in. Commonwealth’s Practice
Management department can help you with the necessary
business planning process, as well as with how to acquire,
cultivate, train, and retain younger advisors. Also note that
Commonwealth has specific parameters for new advisors,
so you should speak with our Field Development department
to discuss your prospective addition in more detail.
Marketing to Gen Y
Whether or not you bring on a junior advisor or other
younger staff, you should be aware that marketing to
millennials may require some different tactics, although
the principles are the same. First, you need to understand
who you are targeting, what they care about, and how you’ll
differentiate yourself from your competition. And, second,
you need a plan of action. Here are a few suggestions to
help you gain traction.
Consider forming a focus group.
Do a Google search
on millennials and you’ll find a slew of references that
address this target market’s needs and attributes, but
another way to ensure that you’re hitting the mark is
to create your own focus group or advisory panel.
If you have some younger clients in your base already, start
with them. If not, consider reaching out to influential
millennials through your networks—and don’t forget to
ask your boomer clients about having their children
participate. By doing so, you will:
•
Let your clients know you’re interested in their
children’s needs
•
Tee up a warm introduction to some potential clients,
who are likely to be the recipients of wealth transfer
from their parents
•
Get invaluable intel right from the horse’s mouth on
what individuals in this age group want and need
In addition to soliciting feedback on your brand and
positioning, be sure to ask them about your website, the
technology you use, the services you offer and how you
offer them, how your fee structure works, and so on.
Given that millennials are always “plugged in,” you will
likely find that your website and your technology are
critical players in how this younger generation views
you. So it follows that the number-one priority in your
marketing plan ought to be your online presence.
