Part three of a series of three articles by Susan Yellin

Part one: Attracting millennial advisors requires a fresh approach
Part two: Millennials seek financial mentoring from their advisors

Jared Webb was only nine-years-old when his father, David, gave him $500 to invest. Jared promptly bought an equity mutual fund, but he learned early that nothing was for nothing and that he had to repay his father with earnings from his paper route.

With this early introduction into the world of money, it was really no surprise when Jared came on board the financial services firm his father and mother, Deborah, started in 1994 – Fernhill Financial based in Victoria, B.C.

In a twist on multi-generational planning with baby boomers and millennials, Jared, 36, came into his parents’ firm originally to just “help out” with the business aspect. Slowly and purposefully, he has built his own book of business and prospected for his own clients.

Jared generally targets his own demographic as his market but does not specifically go after the children of his father’s clients who fall into that category. “That said, if an existing older client wants to bring in a child or a grandchild, depending on the fit and their receptiveness of that client, there have been times when I’ve sat down with the younger generation because I’ll be around here when they retire, sitting on their porch drinking a glass of wine.”

Some clients have been with David Webb for 30 years or so now and they like the idea of continuity between the older and younger generations. “I think we’re batting 100% there,” says David, 63.

Succession planning

With baby boomer financial advisors aging, many are looking to a younger generation for their personal succession plans. In some cases, who better than your own millennial son or daughter or other close relative to take over your business? Not only is the opportunity there for the millennial advisor to continue with current clients to provide much-needed continuity, but they can also relate well to many clients’ adult children, attracting new business.

Risk management

Jared’s strength lies in risk management, helping out asset-poor millennials who face their greatest risk if they are unable to create income. Many of his conversations revolve around disability and critical illness, especially if the client is married with children.

“The learning curve I’ve brought in is to open the perspective of the risk management side and how that can be applied to clients who are more in David’s demographic and client base.”

It’s much the same for Raymond Matt, 58, and son-in-law Aaron Ledlie, 34. Both generations always appear at the table with their business owner clients and the client’s next generation, reaping positive results for their firm, RMW Corporate Solutions in Midland, Ontario.

Comfort and stability

Having both Matt and Ledlie come to a meeting often gives the client a sense of comfort and stability. “Aaron is very active right out of the gate so they know who he is,” says Matt. “So when we go down for our meetings…they see us both at the same time. I think that adds something to the relationship.”

Both Matt and Ledlie look after the same business target market, but acknowledge they can reach a broader age range if both meet with the clients. Ledlie says that when he meets with (potential) clients in their late 30s-early 40s, there is generally more rapport between the two of them, while older clients gravitate more to Matt.

“Having Raymond at the table allows me to sit down with guys who in most situations wouldn’t give me a second meeting,” says Ledlie. On the other side, a younger person might believe that a 58-year-old can’t relate to them. “We can walk both sides of that equation.”

At the same time, many clients see Matt and Ledlie as a “team” that can function well when one goes on an extended vacation or when Matt decides he wants to retire. “Then I’ll be around to pick up the proverbial torch,” says Ledlie.

Competitive edge

This double teaming gives the firm a competitive edge over the banks, their firm’s No. 1 competitor, he says. At the banks, advisors tend to come and go, even in the private wealth divisions, says Ledlie. Many clients, once they hit it off with a financial advisor, like to stick with that person sometimes for the rest of their lives. 

Jared Webb believes it can both disruptive and frustrating for clients to continually establish a relationship with an advisor, explaining to the new advisor what’s important to them and updating their goals five or 10 years down the line. “Part of the reason why I take on clients who are younger is simply because of that – I plan on being in the business for at least the next 15 years. So there is a better chance of them not having to repeat themselves and re-establish a relationship as intimate as financial affairs.”

Technological issues

These financial advisors know that the older and younger generations like to get their information differently. Ledlie, for example, says the millennial age group is known for texting and going on social media, while the baby boomer generation likes to talk in-person or on the phone. Having both generations on board can often counter any technological issues.

Jeanette Brox, a senior financial consultant with Investors Group in Toronto, proves that you don’t have to have a family member from a different demographic group working directly with you to be part of a millennial’s financial life.

Brox has been putting together family trees for a number of years. Parents she has been working with for a long time now regularly refer their children to her to get their financial houses in order.

Sometimes, one thing leads to another. For example, she cites one case in which a long-time client’s daughter and husband were looking to get pre-approved for a mortgage. Once she helped them get that through, they next started to chat about life insurance and critical illness.

The young client’s husband is self-employed with six employees. With the assurance and trust gleaned from the previous encounters, he asked Brox to work on a group benefits plan for them, including life and critical illness.

Working with families

Brox says talking about finances comes up frequently at family gatherings so targeting families has worked out well for her.

“When people get together, whether it’s a holiday or whatever, people always talk about money and what’s happening. One of the reasons I went after the family market when I first started was that I was working hard to help that family save and if I don’t know the beneficiary or their family members, that money is leaving me. It started out purely from a business point of view, but I also like to work with families.”

People tend to google everything these days and millennials are no different. They take to the internet very quickly when they want to research an idea or theory. “But sometimes, it blows up on them,” says Brox. “They have this information but they don’t know the right choice. Things are becoming much more complicated. They need someone to help them make that decision.”

Psychological aspect

That’s why the need for good financial advice continues for the younger generation, says Jared Webb. But it’s not just where to invest, it’s the psychological aspect.

“It’s the emotional impact and emotional decisions that people make – they reach into the cookie jar when they shouldn’t.  A lot of times our job is not on the technical, financial side – a lot of it is listening to people, their dreams and fears and taking all that into account.”

But will the Webbs’ Fernhill Financial go into a third generation? Jared, who has three children, says with only a proven 15% statistical probability that the family business will move into the third generation, it’s anyone’s guess.

“I certainly wouldn’t force them into the business. If they don’t want to go in, that’s fine. If they do, I will support them 100%.”