“No one ever said they started saving too soon,” said Alan Moore, CEO and co-founder of XY Planning Network.
Gen Xers and millennials need financial guidance as they navigate their fast-changing lives, but many advisors feel young people do not have enough assets to be able to pay for advice based on assets under management, Moore said.
That is true if the advisor’s pay is based on assets under management, he said, but young people are willing to pay for advice on a fee basis, he told advisors attending the Financial Planning Association of New Jersey conference in Woodbridge, N.J., on Thursday.
Gen Xers are the post-baby boomer generation born after the early 1960s and millennials, also called Generation Y, were born from the early 1980s to the early 2000s. The XY Planning Network is a support network for advisors who want to focus on younger clients.
“In financial planning, clients usually look like the advisors: They are in their 50s and 60s and many are in the distribution phase of their lives,” Moore said during an interview prior to his presentation.
“A lot of advisors do not want to work with young people, which is fine, but don’t say you can’t work with young people. Gen X and Y has enough money to pay for good advice,” he said. “There also are a lot of small business owners who have money, but no assets to invest.”
These people can benefit from fee-based advice, said Moore, who previously owned his own firm, Serenity Financial Consulting, which he started in 2012 to serve young people.
“I realized that most fee-only advisors were ignoring young consumers because they didn’t meet the advisors’ asset minimums [and I saw] that I would have to redesign the financial planning process from the bottom up in order to serve these younger clients,” Moore said.
“As my business grew, I started getting a lot of phone calls from other young advisors asking me how I had started a fee-only firm focusing on clients under 50 that didn’t have assets to manage," he said. "Those calls eventually led [advisor] Michael Kitces and me to co-found the XY Planning Network to help these advisors start and run their firms."
Now he wants to prove, through XY Planning Network, that large firms can profitably serve younger clients.