How to grow your book and business in a shifting landscape
This is part 2 of our three-part series on how to grow your book and business in a shifting landscape. For part 1, click here.
In the previous blog entry (see here), I talked about the shifting financial advisor landscape. The one trend I didn’t touch was the millennial shift. It seems that for as long as I can remember, the mantra has been “the millennials are coming!” However, the reality is that the millennials are no longer coming, they are here. Over the next five years, millennials will control approximately $3-trillion in wealth. And that number makes up only 10% of the vast $30-trillion inheritance that will take place over the coming two decades. For advisors who don’t know how to deal with millennials, it is time to get very smart, very fast. Growing your book relies on it.
The plus side is that millennials still want to use financial advisors. As one wealth manager told me – “millennials want the same things their parents did, they just want it packaged differently.” This different packaging is because millennials were raised in a different world – one of institutional distrust, on-demand technology, and brands catering to them. However, this doesn’t mean they want something fundamentally different from their parents. At the end of the day, most millennials still want professional guidance when making complex financial decisions. As a millennial who also spent a lot of time selling to my peers, I believe there are three key things an advisor must understand about millennials:
- Millennials want a thought partner, not an authority figure
- Millennials are always on
- Millennials want omnichannel, mobile advisors
Financial advisors who understand this will have a far easier time growing their books. Advisors who don’t will be left behind!
Millennials want a thought partner, not an authority figure
Millennials do not trust institutions and who can blame them? They graduated into a world of bank collapse, a stagnant economy, and crippling school debt. On top of this, from a young age, millennials have learned to Google first, ask second. These two trends mean that young clients do not come in unprepared. By the time a millennial sees an advisor, she has likely already done some research on the subject. It may be a little, it may be a lot, but millennials will do some legwork before seeing you. They won’t go to a doctor without first checking out WebMD, and they won’t talk to you before they do some cursory research as well. Millennials, then, are looking for a thought partner. This is an expert who helps them make sense of the information and guides them through a complex process. Millennials are often portrayed as know-it-alls, but, from my experience, this is unfair. It is simply that millennials don’t want to spend time with their advisor doing what they see as low-value actions. If they can Google it from home, they don’t want you to spend half a meeting with them telling them the same thing. When they spend time with you, they want it to be hugely value-add. They want something they cannot get from the comfort of their own sofas at home.
By being a thought partner, my millennial clients also often became some of my most rewarding ones. They were the clients most likely to reach out with articles and want to discuss a new thought or approach. I appreciated this because it put the onus on me to constantly be on top of my game. If I wasn’t prepared, they would never hesitate to call me out on it. Ultimately, millennial clients were looking for an advisor who would guide them as opposed to an authority figure to tell them what to do. To win their trust, you must often allow them to lead the conversation, acting as a sounding board for their thoughts. If you try to take a paternalistic role, they will be loath to trust you.
Millennials are always on
To win millennial clients and add them to your book of business, you must be very responsive. Like mentioned above, millennials will do their own research. But they won’t necessarily do it during standard working hours. For millennials, a generation of digital nomads who work from coffee shops as often as they do from offices, the working day is often fluid. They do not see sharp demarcations between 2pm and 9pm when it comes to work. This, however, means they also don’t recognize that you might. They are always on and expect you to be as well.
I remember having a younger client, Steven, a few years ago. Steven was a sharp, wildly excitable human being. Meeting with him was a pleasure – he would challenge me based on his own research, but was also open to advice. The one problem with Steven was that his research tended to occur at 2am. At that point, he would get excited about whatever he’d read and text me questions. Now, he didn’t expect me to return his message in the middle of the night, he wasn’t unreasonable. But he certainly appreciated that I would respond as soon as I woke up (okay, as soon as I finished my first coffee). My responses ranged. Occasionally I would answer his question directly via text, but usually, I would use his questions as an opportunity to re-engage with him – to grab a coffee or jump on a Skype call. Steven wanted someone responsive. He didn’t work 9am-5pm and he didn’t care about anyone who did.
Millennials want omni-channel, mobile financial advisors
To win millennial business, you must also be comfortable with multiple channels. Millennials want you to be flexible over different communication methods. As mentioned above, Steven would sometimes text me in the middle of the night, but he would also email me and occasionally tweet at me. The one thing he rarely did was call – a phone call would only take place if agreed upon prior. Advisors trying to grow their business with millennials must adopt an omni-channel approach that plays to their particular preferences. Get a twitter handle, tell them they can text you, and understand that a conversation may flow from one medium to the next. Being inflexible does not work with millennials because they’re not.
Just as importantly, you must be physically mobile as well. Millennials were raised in the world of optionality. They know they have options – other advisors and other channels. Because of this, they expect advisors to cater to them. A low-hanging fruit here is being mobile. This is a definite shift in client handling. For many millennials, there is far more value in an advisor willing to meet them at their favorite hipster coffee shop than there is to spend time in a spacious office with expensive paintings and an expansive view of the water. Millennials often work from coffee shops, and they generally expect their advisors to be willing to do the same. Being mobile, naturally, comes with a whole slew of organizational challenges.
So, have you approached your client’s grown kids and do you have a process for doing so? Did they want their parents to be involved, and did they understand what you do and how you helped their parents? Moreover, how have you changed your business to cater to this market and if you haven’t, why are you going to let someone new walk into a relationship that you’ve fostered with the parents for over 25 years? If you haven’t, our challenge to you is to go do so! Then let us know how it turned out in the comments section.
This is part 2 of our three-part series on how to grow your book and business in a shifting landscape. For part 3 on the ultimate cheat sheet for succession planning, click here.