10 FORUM MAY 2014

RELATIONSHIP MANAGEMENT

Prefers a casualdemeanor

Will Google you

Doesn't like risk

Not interestedin retirement

[ ]MAY 2014 FORUM 11

hen the industry discusses intergen-erational planning, the emphasis ismostly on boomers and their agingparents. There’s little focus on theboomers’ kids who make up Gen Y(also called “Millennials”) — thoseborn between 1980 and 1995. Partof that comes down to basic eco-

nomics: Gen Y don’t yet have the assets of their parentsand grandparents. But consider that their introduction toprofessional advice is likely to come from their parents —the bulk of your clients. And if you don’t have a relation-ship with the kids, they will go with another advisor, some-one who’s in tune with their needs, and take their parents’inherited assets with them.Gen Y clients form 25 per cent of Sara Zollo’s business.

She says they come to her out of dissatisfaction with theirparents’ advisor. “What I hear is these advisors give gener-ic recommendations,” says Zollo, a financial planner withSun Life Financial in Toronto. “Things like, ‘We’re goingto put you in thismutual fund.’ Meanwhile the Gen Y client

walks away not understanding why and how it fits withtheir short-term goals.”Want some insight into Gen Y and how they differ from

previous generations? Read on and learn what strategieswork best.

GEN Y DOES: lots of research and digging for facts.YOUR STRATEGY: Build an online presence.Let’s say a Gen Y consumer is interested in professionaladvice, and receives your name from a friend or familymember. If you think that person will simply call you up,think again. Your name is just the starting point of theirresearch. “In the past, people would trust what the advi-sor says,” notes Syed Raza, marketing manager with LSMInsurance. “This generation already knows what they arelooking for because they’ve been able to do a searchonline.”Gen Y will Google you, see if you have a website, blog,

Twitter feed and/or LinkedIn page. They want to knowabout everything from your investment philosophy to

W

GenerationThe term “Generation Y” conjures up all sorts of images.But if words like “entitled” and “underemployed” cometo mind, it’s time to change your viewpoint, reportsDeanne Gage. In fact, consider expanding it to includethe word opportunity

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Talkin’ ‘Bout My

(416) 925-5997

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Turn your clients’ retirement needs into retirement solutions.

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how you run your business to your extracurricular activities.Simply showing up on the online equivalent of the Yellow Pageswon’t cut it.“If we can’t get a feel for who you are and what you’re all about,

we’re not going to contact you,” says Taylor Hewson, a certifiedfinancial planner with Regina-based TCM Financial Studio.Hewson, 27, runs a practice with his father, John, and brother,Connor. “We’re pretty weary of [advisors] who don’t have a web-site, considering how easy it is to set one up.”As a Gen Y advisor, Shannon Lee Simmons is the first to admit

social media can be a pain. It does take a lot of effort. On her web-site she hosts videos and features an in-depth blog. She is essen-tially giving away content for free. But she also sees the payoff. “If[prospective clients] can’t get a handle on what your ideas are, theywill skip over you,” says Simmons, a certified financial planner andchartered investment manager with Toronto-based SimmonsFinancial Planning, a fee-for-service firm.Simmons likens her approach to a financial version of the web-

site WebMD. Gen Y can self-diagnose their financial issues, but thefact is they’re still going to seek out an expert opinion from some-one who will get to know their unique situation. “People pay forthe relationship, not the advice,” she says. “That’s why it’s not scaryto give the advice away.”Your website doesn’t have to be fancy but should have the basics

such as your contact information and your personal story. On

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Twitter it’s not about how many followers you have. Here, saysSimmons, Gen Y is looking for credibility. What are you tweetingabout? Do people seem interested in what you have to say? Do youinteract with your followers? Do you seem to have genuine Twitterdiscussions with people about financial services and other pursuits?Simmons, for example, used Twitter to partially promote her

Barter Babes project, where she provided free financial advice forone year to women in exchange for everything from a monthlyfreshly baked pie to an airline ticket. “A lot of people can’t afford afee-for-service advisor, so my whole point was to make advice acces-sible and fun,” she explains. She met 300 women, mainly Millennials,through the experience, and it helped springboard her business.Since starting three years ago 650 people have come through

Simmons’s office doors for fee-only advice, but she has about 270regular clients.

If you don’t have a relation-ship with your clients’ kids,they will go with anotheradvisor, someone who’s intune with their needs, takingtheir parents’ inherited assetswith them.

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If the prospect of building an online presence is something thatmakes you feel uncomfortable, Hewson recommends advisors offerseminars tailored to Gen Y issues. Start by inviting your clients’children. Resist the urge to “sell.” Instead, consider a softer approachwhere you talk about the ins and outs of a tax-free savings accountfor 20 minutes, then provide an open forum. “Our generation likesto ask questions and [get direct feedback to their questions],” hesays. “[The goal is for] you to become the natural place for themto go when they need more [specific] advice pertaining to theirsituation.”If a prospective Gen Y client meets with you, he or she won’t

come empty-handed. The person will have done their homework,and will have a lot of questions. They won’t likely say, “We don’tknow much about investments and financial planning, so whatcan you tell us?” However, Hewson doesn’t consider that to be abad thing. “[Their questions] drive the conversation and make ourtime together more valuable,” he says.Some of the information they find won’t be accurate, which is

why Sara Zollo sees it as her job to filter through the garbage. SomeGen Y prospects, for instance, wrongly believe that advertised ratesof return don’t account for MERs and other fees, she says.

GEN Y DOES NOT: care about retirement … yet.YOUR STRATEGY: Short-term goals and solutions.Remember the bank billboard that showed a 23-year-old womaninvesting for 10 consecutive years, and how she accumulated moremoney for retirement than a 32-year-old man who started invest-

ing the same amount for 30 years? That kind of marketing won’twork with this generation. “We understand that we will retire someday, but it’s not at the forefront,” explains Hewson. “We’re not nec-essarily scrimping and saving for this magical age of 55 or 60.Focusing too much on retirement is a definite turnoff.”Stefania Di Verdi concurs. The 30-year-old online managing

editor for MoneySense often writes and edits stories about the GenY consumer. “No one I know is really talking about investing,” shesays. “It’s more about how they can save enough for a house whilepaying down debt, or how they can join finances with theirboyfriend or girlfriend. It’s mainly about getting established, get-ting on the right path. Investing [comes] later.”Okay, it’s “elephant in the room” time. How do you make money

if the Millennials aren’t ready to buy investments or insurance?Charge for your advice. Di Verdi believes many are willing to pay.She often hears from young investors wanting to pay flat fees forfinancial plans that they can update later if they need to. The flat-fee model is actually the basis of Simmons’s practice. She offers anarray of packages where prices are all-in, and not based on anhourly rate. One package is cash-flow planning, which covers every-thing from how much house you can afford to paying down debtand saving/planning for children.That isn’t to say you should avoid talking about the future;

just de-emphasize it. Hewson focuses on the term financial inde-pendence. “Saying to a Gen Y client ‘If you save this amount,you’ll be able to retire by age 55’ isn’t useful to them because theyhave many other things to consider over the next 20 to 30 yearsof their working life.”

14 FORUM MAY 2014

Zollo sees it as a matter of instilling good habits, and what thisclient needs to do on a monthly basis in order to achieve his or hershort-term goals.

GEN Y DOES NOT: like to take on much risk in their investments.YOUR STRATEGY: Educate and use your perspective.According to research from Accenture, 43 per cent of Gen Yinvestors describe themselves as conservative investors. Their port-folios may look similar to those of seniors, with a focus on preserv-ing capital.This is not news to Hewson, who often hears Gen Y clients say

they’ll invest but don’t want to lose any money. While markets maycurrently be on the upswing, the downturn of 2008 is still a freshmemory for this generation, Zollo says. Many may have seen theirboomer parents lose a substantial chunk of their retirement sav-ings during this period.When Zollo sees GIC-type portfolios and asks them about it,

the answer tends to be a variation of “I didn’t know what to choose— I picked this one because I was told it wasn’t too risky.”“They are open once I show them they are being too conserva-

tive long term,” says Zollo. “But without any guidance they tend todefault to a more conservative approach.”Hewson will often show index charts to display markets over

the last 60 years, but says veteran advisors have the edge overyounger advisors in this area. “The biggest value an older advisorcan bring is perspective,” he says. “They’ve seen people go throughthe various stages and come out to the other side debt-free andable to retire, and they can speak to that.”

GEN Y DOES NOT: like stuffy attire.YOUR STRATEGY: Be yourself. Loosen up.Gen Y clients could care less about pinstriped suits and whatHewson calls the “ultra-professional” look. His firm is set up likean art studio — open concept, to make financial advice less intim-idating. Simmons’s Toronto office is on trendy Queen Street insteadof in the financial district. Zollo, who works in a more traditionaloffice tower, tries to make her appearance more casual by wearingfunky jewelry.

GEN Y DOES: value someone who “hears” their needs.YOUR STRATEGY: Avoid being what Simmons calls thethree Ps: patronizing, preachy and parental.Gen Y’s first encounter with a financial advisor is usually throughtheir parents. One of Hewson’s clients mentioned that his parents’advisor was great — for his parents. Zollo hears similar comments.Unfortunately, these advisors put little to no effort into setting theirclients’ kids on the right path. “Some older advisors just give gener-ic recommendations like ‘we’ll just put you into this mutual fund,’”Zollo explains, noting that Gen Y values more personal input intothe planning process. “They don’t want to just be told ‘do this’ or‘do that,’ but want to see solutions simplified and tailored to theirspecific situation.”

Gen Y may not bring much to the table asset-wise, but theirconcerns also don’t eat up much of your time. They usually haveone or two goals like paying down debt or saving up for a house,”says Hewson. “Take an hour or two to go over their situation andgive them advice, and they’ll walk out feeling great. It might justbe the act of them taking responsibility for their financial life. Thatreally does go a long way when, down the road, they do have moneyto invest.”Reaching out to the next generation can be as simple as listen-

ing to the parents’ stories about their kids. When Stefania Di Verdigot married last year, for instance, her parents’ advisor sent her asmall gift. That was her first contact with the advisor. “My dadnever said ‘come and meet her,’ and she never reached out to mebefore,” Di Verdi says. “But it was a very nice gesture. I know whereshe’s going with it, but that’s fine.”Di Verdi noted the advisor never followed up with her after that.

“I’m curious to see if she will.” �

DEANNE GAGE is a freelance writer in Toronto and can be reached at deannegage@gmail.com. If you would like a PDF of this article, please email kdoucet@advocis.ca.

RELATIONSHIP MANAGEMENT

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