Jeff Gonzales, a managing director at TIAA-CREF in Austin, Texas, recalls a story from his early days as an advisor: "An older client with a lot of money told me, 'I have socks older than you!'"
In time, Gonzales earned the client's trust. But it's not an uncommon scene, particularly for young advisors. Unfortunately, the problems associated with age differences don't necessarily go away as advisors gain maturity. Even those with a few gray hairs and a proven track record may find that the next generation of clients-younger clients-meet them with a similar kind of distrust.
"One must handle grandparents differently from the kids and/or grandkids," says Larry Rosenthal, a financial advisor with ING Financial Partners in Manassas, Va. "Grandparents remember the Great Depression, world wars, gas lines, Bob Hope and when the world moved slower. Baby boomers tend to wonder if they'll have enough to make it through retirement, [and] the youngest clients want to arrive financially faster than their ages allow. All three situations require different types of investments, risks, products and strategies."
What can an advisor do? How can you juggle your approach while keeping your integrity?
Building A Relationship From The Start
To be sure, age shouldn't matter. But whether the client is older or younger, doubts can creep in. Cues may be missed, communication misunderstood. "Though each client is unique, certain trends emerge among generations," says Brittain Prigge, director of relationship management at Balentine, an Atlanta-based independent investment advisory firm.
For example, she says, the octogenarian patriarch who created the family's wealth in the first place might prefer face-to-face meetings, while his 30-something heir who has taken over the family business and always known wealth would rather communicate by text message. "Establishing and understanding who your client is today will pave the way for the future," says Prigge.
Most advisors give new clients an assessment, asking about individual goals, needs, etc. You never want to assume what those things are because of their age. Dennis Cambal, registered representative at JHS Capital Advisors in Osterville, Mass., says, "In essence, a comfort level of trust should be built for a long-term relationship"-one that minimizes the age difference. "It's important to determine the role that clients, young or old, want me as advisor to fulfill, and to share our expectations for each other. If an attitude persists by either a younger or older client, I'll highlight my professional status, like a coach in any sport."
That said, some clients may nevertheless have misgivings about an advisor they perceive to be either too young or too old, no matter how the advisor tries to alleviate those misunderstandings. "If there's an age difference between you and a new client, the client may always be watching you," says Diane McCurdy of McCurdy Financial Planning in Vancouver, British Columbia. "You absolutely have to employ a variety of techniques when working with various generations."
Handling Younger Clients
Never is this more true than when advisors serve multiple-generation families. "Just because you helped the parents or grandparents doesn't automatically mean the next generation will come to you," adds McCurdy. "You always have to earn the business."
Younger clients especially might need to be encouraged to participate and ask questions, veteran advisors say. At the same time, it's equally crucial to listen. McCurdy says you need to "research trends and learn what is important" to each generation, and don't take anything for granted.
That's partly because younger clients tend to expect different qualities in an advisor. "Generation X and Y investors tend to rate the firms they work with significantly lower than baby boomers on nearly every aspect of firm performance," says Kim Dellarocca, director of segment marketing and practice management at Pershing, a BNY Mellon subsidiary in Boston.
Younger clients, she says, tend to be less interested in an advisor's credentials and experience; instead, they want to know exactly what the advisor can do for them and how it's done. They "tend to be more focused on the best use of their time ... whereas boomers are more focused on relationship building," says Dellarocca.
And forget the fancy office decor. That, she says, doesn't impress younger clients as much as "a dynamic Web site with easy access to personalized information. [For them,] a Web site should be all about them and what they can do-not about the advisor."
Only 65% of 25- to 34-year-olds rate their financial advisors as good or excellent at quickly addressing their concerns, she says, while the satisfaction rate is 80% for those over 65.
These findings speak directly to advisors' longevity in the business: Most of them want to serve younger clients, if for no other reason than to lay a foundation for the future. Sometimes it happens naturally as children and grandchildren grow up and take an interest in family finances. But often the advisor has to adapt.