Kelly and her firm are focused on asset retention for the next generation, and her fees are based on the AUM of the overall family assets. Her young clients might be future inheritors, but they are also more concerned with the here and now—getting married, buying a house, establishing a budget. Kelly uses the tools from FinLife Partners to engage her young clients, notably “Money Mind,” an exercise to help clients understand decision-making biases, and “Honest Conversations,” an exercise to help them establish goals. She’s found that the financial life management system and digital tools really appeal to younger clientele. The exercises help them identify how they feel about money and what matters to them in life, clarifying their fears, aspirations and values without requiring a ton of financial education or lingo.
Morgan’s firm is also known for socially conscious investing, something many young inheritors appreciate.
Observation #2: It Takes One To Know One
Roberge and Bera have the advantage of being younger themselves, and both feature their own life stories in their value propositions. Their work style is also relevant to the digital natives—I am very impressed with the appointment scheduling tools and communication options they offer. There’s no need for stuffy offices, or in fact much overhead at all, because they tap into cost-effective technology that scales what they do. When their clients begin building investable wealth, Roberge turns to TD Ameritrade and Bera to Betterment for Advisors for turnkey solutions allowing them to grow their clients’ assets under management.
Kelly admits that age is a problem for most advisors, including her. She and her partners have spent the last year building and investing in a plan to be “future ready.” That means they must hire younger advisors and refresh the brand. In the meantime, she has found a way to bridge the generation gap by training a young, outgoing person on her team to conduct the exercises with clients, getting them to explain how they feel about money and talk about their personal priorities.
Observation #3: Efforts Need To Get Bigger, Faster
It’s great to hear the enthusiasm and success stories from entrepreneurial young planners and forward-thinking industry leaders, but we have a scale problem. With their coaching models, Roberge’s and Bera’s businesses are incredibly lean, but they have only so many hours in the day. How many clients can they take on before their own lives are out of balance? Kelly, meanwhile, is prioritizing inheritors, but that’s a defensive marketing strategy, not offensive. Where will the huge wave of young people and their assets go?
Imagine calculating pro forma projections for the wealth management business as boomer assets “roll off” and only a portion are retained by traditional firms. What if Amazon entered the industry? The traditional direct-to-consumer firms like Schwab and Fidelity will use marketing, technology and scale to get their share. But the wealth managers—boutique firms, RIAs, broker-dealers and private banks, for example—how will they fare?
Let’s Get To This Now, Not Later
What Bera, Roberge and Kelly are proving is that many upwardly mobile millennials value and are willing to pay for human advice that feels timely and relevant to them. So why do so many industry executives have their heads in the sand?