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Ageism Goes Both Ways

Ageism appears to be alive and well in our industry.

In just one day, I experienced it from opposite perspectives, and it turns out that no one age group is immune from criticism and the lumping of individuals into stereotypical buckets.

Generational Gaps on Display

First, I was in a meeting listening to an ensemble of tenured advisers describe the behaviors of their millennial colleagues. They characterized the younger generation of advisers with the usual labels—entitled, impatient, lackadaisical.

More pointedly, these older advisers dug into the millennial advisers’ expectations, noting that they wanted the security of a salary but resisted opportunities that come with taking risks. All of the tenured advisers remembered the stage of their career when the only thing they could rely on was what came from rounds of cold calling. “I remember when . . .” was the most frequently used phrase of the group.

All this talk stemmed from the tenured advisers’ need to evaluate the firm’s compensation policy. The younger advisers wanted salary increases after being in their position for just two years and still not producing any revenue. And one who had just five years under his belt had recently asked when he could expect partnership. The older group, used to a certain way of “earning one’s stripes,” was appalled at such a request.

Grumblings on the Previous Generation

Later the same day, I was in another meeting, this time with a group of young advisers who had their own generalizations to make. They characterized the baby boomer advisers as “milking” the organization of profits as they neared retirement and being technologically inept.

The younger advisers believed that the senior advisers should want to retire once they hit 65. At that age, the thinking went, the senior group would of course want to begin transferring ownership of the firm and fade into the sunset.

As the younger generation saw it, tenured advisers who hung around instead of retiring were full of excuses for sucking up all the income despite the fact that the younger advisers were the ones now doing all the work. The result, in their view, was a profit-sharing benefit plan with no profits going their way.

Moreover, these younger advisers lamented, the senior advisers needed to be “babysat” from a technology perspective, but they were closed-minded when the younger generation offered any marketing ideas, especially for anything related to social media.

What Gets Said Behind Closed Doors

Stereotypes can be a helpful tool. They can help us initially get our brains around vast amounts of information. How can you best reach a certain group of prospects, for example, based on their age, location and risk profile? Stereotypes are a starting point.

But stereotypes are dangerous when they lead to groupthink. When young advisers get together and spread the perception that certain characteristics automatically apply to all tenured advisers, it’s just as divisive as when tenured advisers get together and spread the perception that certain characteristics automatically apply to all millennial advisers.

It would seem wise—maybe even a breakthrough—for all of us to let the stereotypes go. We could instead recognize that tenured advisers are the ones who have built significant successful practices. And see younger advisers in their roles as the ones who will one day take over these businesses and hopefully improve upon them. Beyond those two positive perspectives, we could view our colleagues as individuals—and not representatives of a particular age group.

In fact, we don’t know what happens next or what the next generation will bring. What we do know is that ageism and divisiveness have persisted across generations. Perhaps we all need to chill out a bit!

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Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass. She is a regular contributor to the FPA/Journal of Financial Planning Practice Management Blog.


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Be A Gen Savvy Planner: Take Off Your Generational Lenses

Our early environments shape us for the rest of our lives.

That’s why there is so much difference between the generations, said Cam Marston, an expert on generational change and founder of Generational Insights.

Marston told FPA Retreat attendees in April that baby boomers are tough and were never told they were unique or special, so they overcompensated by telling their kids—who are Gen-Xers and millennials—that they were extra special. Therefore, those two generations were raised to think they were unique and that their needs were very important.

“What imprints on younger people impacts them for the rest of their lives,” Marston said. “Millennials and Gen-X have been brought up to say, ‘What’s going to make me happy?’

Planners should understand the vast differences between the generations and know how to talk to and communicate with each one.

Boomers. To connect with the boomer, Marston said, you need to understand how they see the world. They’re hardworking and they have the mentality that retirement is going to be great. They want to hear your story and know where you come from.

Hanging up your diplomas or certificates in your office during your meetings with boomers is a good idea.

Key points about boomers:

1.) Understand and acknowledge their work ethic—which they generally measure in hours (i.e., “I work 50-60 hours a week”).

2.) Ask them about their accomplishments and acknowledge what they’ve done.

3.) Communicate that you are on the same page. Emphasize that you are a team.

5.) Pick up the phone and call them and meet with them in person.

6.) Beware of too much technology.

7.) Know the difference between “leading” baby boomers (older than 62 and like communication that emphasizes how they deserve retirement); and “trailing” baby boomers (ages 53-61 and need to be reassured that they’re going to be OK despite setbacks they experienced in retirement savings thanks to the recession).

Gen-Xers. This generation are stalkers of product and services. They demand to be an educated consumer and are leery of “being had,” Marston said. They are interested in how well you can teach them to make a good decision. Your relationship should be a partnership.

Key points about Gen-Xers:

1.) They are going to do research and have you prove why your advice is better than what they found via this research.

2.) They tend to prefer email and your communication should be brief, succinct and to the point.

3.) Don’t waste your time leaving them voicemails.

4.) Make sure your web presence is pristine—they’ll look you up online before contacting you.

5.) The Gen-X mother has tremendous buying power and influence. She’s coming up in terms of her earning, she’s informed and she’s fully engaged. Keep her happy.

6.) Communicate how decisions will affect them personally.

Millennials. Millennials are individuals with a group orientation. They believe they’re unique but they also enjoy being part of a group.

Millennials think, “You tell me about me and what’s going to happen and how I’m going to feel about it,” Marston said.

Key points about millennials:

1.) They’re optimistic.

2.) You will get more attendance from them if you ask them to bring people. Engage them as a group and they will be more interested.

3.) They feel they are unique and special.

4.) They don’t think so much in the long-term as the other generations.

5.) They are achieving milestones (i.e., getting married, buying houses, having kids) later in life than the previous generations.

6.) Communicate via text messages and social media.

Understand these key points about each generation and try to see the world through their eyes when you’re talking to them.

“Everybody pitches and articulates their value from their own generational lense,” Marston said, “but I’ve got to take my lenses off and put on somebody else’s.”

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Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org


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4 Ways to Retain Heirs

Ponder this worst-case scenario when it comes to introducing yourself to your client’s heirs: you’re at your client’s funeral and you offer both your condolences and a business card. The chances of those children and grandchildren calling you up after that are pretty slim.

Whatever you think of the younger generations—they’re lazy, entitled, glued to their phones—the fact remains that $24 trillion in wealth will transfer to them by 2030. They’ll need help. Introducing yourself to your clients’ heirs early and genuinely is the key to retaining that business.

Maria Quinn, adviser education specialist for Vanguard, told FPA Retreat attendees in April that there are ways to meaningfully engage with the adult children of your clients. First, Quinn advised, understand how the younger generations are different and how they perceive financial advice; second, fully engage both spouses; and last, authentically connect with the heirs of your clients.

In a 2015 Deloitte survey, 40 percent of boomers surveyed said their children work with a financial planner. Of that 19 percent said those children worked with a firm other than the ones the parents worked with and 21 percent worked with the existing firm.

Combined, Gen X and millennials (born between 1965 to 1997) are 141 million people. They’re different in the way they interact with financial planners. The acronym used to describe them is HENRY: high earner not ready yet. They will have wealth; they just don’t have it yet.

The younger generations are noted as the “401(k) generation,” Quinn said. They are saving automatically and don’t generally know where their money is invested. Both Gen X and millennials are socially conscious and express interest in learning more about retirement from their employer. Gen X tends to be distrustful of the financial advice industry while millennials see it as being too sales oriented.

But a smart move in reaching that next generation is to form a relationship with their mothers. Quinn said that many advisers tend to ignore the wife in client couples.

“She may be quiet in the room, but don’t think she doesn’t have opinions,” Quinn said. “She controls about 90 percent of the decisions. You want her in the room. You want to make sure you’re engaging her as much as you can.”

Some examples Quinn offered attendees to authentically connect with clients’ families were:

Do something special for your favorite clients. Quinn noted a planner who’d planned an 80th birthday party for his favorite client, pleasing her and impressing the family alike.

Offer pro-bono services for life events. Offer to do a financial plan for your clients’ children when you hear they are getting married or are expecting a baby. This could help forge a new client relationship and loyalty for years to come.

Pair up young advisers with young clients. Quinn said pairing up your clients’ children with your firm’s younger advisers would also be helpful. It would get that next-generation business in the door, while giving your next-generation advisers some valuable experience.

“Younger investors like to have a cultural similarity with the advisers that they’re working with,” Quinn said.

Be a savvy communicator. Quinn encourages planners to utilize technology to make a positive impression. She noted that the next generation of clients will do a Google search on you, and you want to be sure that what they find is appealing. Also, note that this generation probably doesn’t prefer phone calls, but rather emails and texts.

“If you do have clients whose children you want to make meaningful connections with,” Quinn said, “determine the most effective way to initiate engagement and establish a strategy for sustaining engagement.”


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Middle Child Syndrome: Seeking the Gen X Factor

Did you know Kurt Cobain would have turned 50 this year? The ‘90s are back in vogue with flannel button-downs, chokers and logo T-shirts trending once again. While the styles exemplifying the so-called Generation X are all the rage, this cohort between baby boomers and millennials is often forgotten in one critical area: wealth management.

When is the last time you had a conversation with these wealth builders in the middle? If you haven’t yet picked up the phone to call a boomer’s Gen-X beneficiaries, you may be missing a great opportunity to maintain a relationship once wealth has been transferred. And that wealth will certainly reach Gen X far before it reaches millennials.

Gen-Xers are already a captive audience for financial advice because many are well on their way toward saving for retirement. It’s worth noting that this is the first generation that can’t rely on a pension or defined benefit plan, and many instead opt to participate in their employer-sponsored retirement plan. They are also likely to be the first group without the fallback of Social Security if funds are tapped, as expected, by 2035, according to a June 2016 article on CNN Money.

This group is also already fluent in “adulting.” Often preferring a 9-to-5 job over a freelance economy gig, Gen-Xers’ steady income makes for sound long-term planning. They often have less debt to overcome than millennials, and with college and home ownership costing far more now than a generation ago, Gen-Xers consequentially have greater equity. They are also far less likely to crowdsource their next financial move, instead opting to pay a premium for quality service with a real person.

But it’s not too late to start engaging Gen X prospects. Here are some tips for knowing when and how to connect with this key demographic:

• Gen-Xers don’t want to be called only after a life event takes place. Including them in the conversation early on shows that you are interested in the long-term well-being of their family and helps foster trust.
• Advisers should consider a longer view by taking on the high-probability prospects that may not yet meet certain asset thresholds or those who have assets in a plan they cannot yet access. By offering fee-based services that may fit other immediate needs like financial planning or debt consolidation, advisers can focus on the prospect and not just the asset.
• Many Gen-Xers are starting families or already are thinking about the future of their growing children. These clients would benefit from working with an adviser on their own estate planning or saving for college, creating a multi-generational pipeline of prospects.

The opportunity is out there for the taking. But don’t take it for granted: Gen-Xers are also one of the first generations to heavily adopt technology and advisers may risk losing a client to a robo-adviser or other financial advice model if making that first call takes too long. It takes only one life event for assets to be transferred. Will you be the one they call?

To read more tips that can help engage Gen-Xers, visit our Wealth Management resources.

Matt Sommer

 

Matt Sommer
Vice President and Director, Retirement Strategy Group
Janus Capital Group
Denver, CO