Should veterans work with the millennial generation as clients? Who should millennial advisors work with?

October 14, 1985 was a pivotal day. Had I made a different choice that day you would have never given a crap about anything I would ever say about helping FAs be successful, both in terms of client experience and your own goal achievement. There would not have been a speaking career, industry best-selling books, no articles written or read, and no workshops or training and coaching programs. I might have washed out like so many others who enter our business. That was an important day. As a person with no background or formal education in finance and no contacts in the community it was not easy to get hired at a major firm in a wealthy area like La Jolla, California. But now the 3-month training program was behind me, the Series 7 test had been passed, and it was my first day in the real world of being a “broker.” It was time to go get clients. My sales manager, Steve, and I had the following conversation:

Bill: So, Steve, what’s the process for me to connect with rich people in La Jolla and get them to change advisors and become my clients?

Steve: Bill, that’s not how it works.

Bill: Uh… not how it works?

Steve: No. You’re 26 years old, you’re not wealthy, you have no experience working with wealthy people, and you don’t have any contacts with wealthy people. You’ll build your business by working in your “natural market.”

Bill: You’re (expletive deleted) kidding, right? Your advice for my success is that I work with other broke 26-year-olds? Am I supposed to wrestle away their beer money to open an IRA?

(Actually, I wasn’t exactly broke. Broke was my goal. My friends would say, “damn I’m broke” and I’d respond, “how’d you do it?” If I could just get my net worth back to zero, maybe someday I would be financially successful.)

Steve: As other young professionals grow in their careers and start earning and saving more money, your business will grow with them.

That was the day I “fired” my sales manager. The choice was to NOT allow myself to be infected with his limiting beliefs about what was possible. Just because he didn’t know how to teach a young advisor how to get older clients with money did not mean it couldn’t be done. On that day, I dedicated myself to figuring out how to develop the people skills necessary to meet financially successful people, how to talk to financially successful people, and how to offer them a better value promise so some would leave their long-time relationship with their other advisor(s). (I’m referring to people with $1M+.) Had I made a different choice, you’d surely be reading someone else’s column in FA Magazine today.

As an advisor who delivers a high-touch and personal client experience it makes sense to work with people who have more money, right? You’re not trying to have a big clientele with many hundreds of clients. You want 40, 50, or 60 great clients you can really make a difference for. You’re not a mass-market financial services business like a bank or consumer-direct financial services company with employee advisors in a customer service call center or a robo. Hopefully, you’re not a one-trick pony product-flogger either.

Whether you are a veteran or newer advisor, here are some key ideas to consider as you plan to grow your business to the next level.

I’m not a fan of the generation labels like baby boomer, gen x, gen y, and millennial. From a business development and client service viewpoint, there are people who have enough money to make your business work and there are people who don’t. Perhaps a more relevant question to consider is, “will this generation of people over 50 keep their money longer than previous generations of 50+?” If the answer to that question is “yes,” then worrying about who’s going to inherit their money and when is a non-issue. By the way, the answer to that question is definitely “YES.” The fastest growing demographic is people over 100. Why? Advances in science, medicine, genetics, robotics, nanotechnology, artificial intelligence, and synthetic biology will ensure this hard trend continues. The smartest people in the world are not on Wall Street trying to figure out how to create and sell the next derivatives. The smartest people in the world are working on much bigger initiatives. Dr. J. Craig Venter, the genius who led the project to successfully map the human genome much faster and less expensively than our government dreamt possible, recently co-founded a new company called Human Longevity, Inc. Their mission is to make age 100 the new 60. He’s 70 and would certainly like to accomplish this goal in the next decade or two. If you doubt these breakthroughs, the rate of acceleration, or their impact on longevity just Google “latest breakthroughs in science and medicine.” Prepare to be amazed.

How will this affect the trillions of dollars of wealth transfer you’ve been led to believe is inevitable? First of all, what’s your experience working with people who inherited money compared to those who earned and saved it themselves? Do you even want to work with the kids of your clients? Some who may be ungrateful little vultures who will surely piss away everything their parents worked a lifetime to achieve faster than you can say mutual fund. The predicted wealth transfer is based on linear thinking using old data. People in their 60s, 70s, 80s, and 90s are likely to live much longer than their hoping-to-inherent-the-cash kids and grandkids realize. How much money will there be to pass to the next gen if the parents live another 10 or 15 or 20 years? You do the math. Run the cash flow projections for your clients if they live to 110 instead of 90. Besides spending their money on these extra years of day-to-day lifestyle, they will have the opportunity to make investments in their health and longevity that you could only imagine by watching Star Trek. Steve Jobs was worth $11B when he died from pancreatic cancer. If he could have purchased an artificial pancreas or had one grown from his own stem cells for say, $11B, what do you think he would have done? Who do you know who would give up all of their money to have their health back?

So the current 50+ group is going to keep their money longer, maybe much longer, than so-called conventional wisdom has estimated. Then that begs the question, “will this generation of younger people in their 20s, 30s, 40s be different when it comes to their money behavior than previous generations?” When will they develop an appreciation for financial planning, saving, investing, and insurance? Is it conceivable that the generation with 42 million living at home well into their 20s and even 30s might start acting like a responsible grownup a bit later than their parents? While every generation is unique in some ways, human nature doesn’t completely change in a generation. As their parents and grandparents live much longer than expected, this could reduce their fear of running out of time; therefore, give them even less incentive to warm up to financial planning, saving, investing, and insurance. Their attitude might become, “Well, if I’m going to live 20 or 30 years longer I guess I can start saving 20 or 30 years later.”

Bottom line -


* Don’t sweat the younger generations because the majority of them are NOT going to earn, save, and invest their money any differently than every previous generation: over decades.

* Their inheritance is either going to be much smaller than projected or non-existent.

* Do you really want to inherit your clients’ kids as clients? What’s your experience been like working with the kids of your clients so far? Might it be better to go get another “old” client than to be stuck working the inheritor who doesn’t share the same values and personality traits that made their parents an Ideal Client for you? How much different are they than lottery winners? We all know what great clients lottery winners make, right?

* Work with people over 50 with money.

* You are also going to live much longer; therefore, need more money than you may have thought, so get ready to be in this business 5 – 20 years longer than you planned.

Younger advisors:

* If comfort is your goal, success is not in your future. Do what every generation of the most successful advisors have done before you. Get out of your comfort zone working with people your own age who don’t have much money (and are not likely to have serious money for decades) and develop the people skills to rescue the 50+ wealthier clients from their old advisors, many of whom are resting on their laurels assuming their clients will never leave them. They will leave. It’s your job to learn how to make that happen.

* You understand that as a younger person who entered the financial services business you’re weird, right? I mean, really, how are those conversations going with your peers about delaying gratification, paying yourself first, living within your means, doing financial planning, saving, investing, and buying insurance? Has it gotten any easier to wrestle away their beer money so they open an IRA?


Bill Bachrach’s thinking, writing, speaking, coaching, and training have made him one of the most popular resources in the world for successful financial advisors who seek to be at the top of our profession in terms of client service, business success, and personal quality of life. His books are industry best-sellers and his articles appear in the most prestigious financial services publications around the world. He has delivered well over 1,000 presentations worldwide for almost every major financial services firm and association, including 5 times for the Million Dollar Roundtable and 4 times for Top of the Table. He is a member of 2 Halls of Fame: Financial Planning Magazine’s Hall of Fame and the National Speakers Association’s Hall of Fame. Most importantly, what advisors learn from him produces results.