Wooing the millennials

But Draper’s book of business is mainly focused on millennials (a.k.a. Gen Y) – young people aged 25 to 37. And Draper, as a member of this demographic herself, knew that a strong social-media presence is vital in reaching this market.

Fortunately for Draper, her firm, Your Partner in Benefits Inc., is run by her father, David Draper, who was willing to put aside his doubts. “He was skeptical at first,” Draper says, “but he has allowed me to take over that side of the business and he’s come around a little bit.”

Draper also uses LinkedIn and her personal Facebook page to communicate with clients.

Draper’s experience isn’t unusual. Millennials are the educated, web-savvy and somewhat maligned cohort that follows Generation X. While there are no hard numbers to define this demographic, millennials generally are said to have been born between 1980 and 2000. And whether these young people inherit wealth from their parents or go on to develop successful careers of their own, this group represents the future for the financial advisory business.

Millennials often are portrayed as being debt-burdened, asset-poor and underemployed – making them low-priority prospects in the eyes of experienced advisors. So, younger advisors usually are tasked with serving them. And if you are seeking to woo this generation, millennials are difficult to define and target.

“The thing that’s challenging about understanding this group is that they tend to defy categorization in a lot of ways,” says Sean Lyons, associate professor with the college of business and economics at the University of Guelph, who studies generational differences in workplace attitudes. While Canada’s growing ethnic diversity is particularly evident in the millennial generation (making it more difficult to generalize), he adds, some conclusions can be drawn about this demographic group.

The main feature that you need to understand, Lyons says, is that millennials are radically individualistic: “Anything aimed at trying to recruit them – as clients or as employees – has to be on their terms.” That means if you are accustomed to working with boomers, you might have to reconsider your tried-and-true methods in reaching and serving these clients.

Samuel Waxman is counting on his familiarity with the millennial mindset to build his business. At age 27, Waxman, who is in the process of earning his CFP designation, is managing partner with Toronto-based Millennial Financial Group, which launched last year. Offering insurance and segregated funds, Waxman plans to recruit other young advisors interested in targeting millennials. Waxman has been selling insurance for three years and manages about 300 clients, a good chunk of whom he acquired through working in his father’s practice.

Waxman plans to be in the financial advisory business for a long time and believes that targeting members of his own generation, whom he believes are in the dark when it comes to insurance, is the best way to build his business. But the key, Waxman says, is sharing information with millennials now, as they are starting to build their careers and families, and before the “insurance window” closes.

“Sharing information” with millennials means rethinking your approach to client communication, in terms of both the medium and the message.

Conventionally, advisors would rely upon the phone or, more recently, email to reach clients. But these methods of communication are passé for younger Canadians. Most millennials prefer the efficiency of text over pretty much anything else.

“Sometimes they don’t even answer their phones, but they’ll answer a text message 30 seconds later,” says Draper, echoing the lament of parents everywhere.

Lindsey Kilgour, an advisor with Investors Group Inc. in Sudbury, Ont., says she often receives off-hour texts from her millennial clients – for example, on a Sunday afternoon as they’re considering making an offer on their first home.

“They’re used to getting information fast,” Kilgour says, adding that if you are interested in serving this group, you need to put accessibility high on your priority list.

Kilgour, who joined the financial advisory industry after graduating from university six years ago, says her book of business is split between older boomers (acquired from a retired associate she worked with after graduation) and millennials.

At age 28, Kilgour exemplifies an attitude that often is attributed to millennials: she is equally passionate about work and leisure. Kilgour, whose passion is travel, challenged herself to visit 25 countries before the age of 25 – and succeeded. She regularly relays travel tips and deals that she spots online to her travel-loving clients.

An illustration of Kilgour’s blended work/lifestyle approach: while on honeymoon in Cambodia last year, she sent an email greeting to her clients to let them know that she was still looking out for them. To ensure that her social presence is well-maintained, Kilgour pays someone to manage her Twitter account and LinkedIn updates.

Rosemary Horwood, associate investment advisor with the Horwood Team, which operates under the Richardson GMP Ltd. banner in Toronto, says one of the main differences between millennials and their predecessors is that the younger group doesn’t seem to suffer from information overload.

“They just want to be continuously updated,” Horwood says of her young clients. “They don’t want to be in the dark and they don’t want to have to call me and say, ‘What’s going on?'”

Horwood has noticed, for example, that her millennial clients track their investments on the firm’s online access portal – and they check frequently.

– Keep it honest

Of course, communication goes beyond method. Lauren Friese, founder of TalentEgg Inc., which operates a campus-level recruitment website from Toronto, says an advisor interested in reaching millennials needs to aim for authenticity. Millennials are the generation, she points out, that grew up on personal video recorders; they expect to be able to bypass the commercials and the promotions. “If it’s not genuine,” Friese says, “it’s not trusted.”

Cecilia Tsang, advisor with Rogers Group Financial Advisors Ltd. in Vancouver, agrees that millennials insist on honesty, however brutal, over sales pitches. “You have to be upfront with them,” Tsang says.

Millennials want to know as much as they can about the financial planning process, how their advisors are paid and what is expected of them as clients. The upside of this characteristic, Tsang says, is that millennials become disciplined investors once they have the tools in hand.

– Personal attention

Although millennials’ lives often revolve around the online world, they still may want or need personal attention. This is, after all, the first generation to deal with so-called “helicopter parents” – who hover over their kids while they’re doing homework and, some would argue, become overinvolved in their children’s lives.

According to Lyons, millennials – unlike older generations, such as baby boomers and Generation X – actually care about the opinions of their parents.

“[Millennials] are not at all averse to taking advice from anybody who shows respect,” Lyons says.

That’s why it’s important that you avoid taking a heavy-handed approach with these clients. The ideal role for you when working with millennials is to be a coach, Lyons says. A more flexible style that emphasizes counselling over instruction is more comfortable for millennials. Even Lyons’ teaching methods have changed over the years to accommodate this group, he adds: “I can’t lecture. They don’t want that.”

– Interacting as equals

Ruth Wright, director of human resources research with the Conference Board of Canada in Ottawa, is co-author of a survey examining workplace attitudes of millennials and their Generation X counterparts.

One significant finding of that study is that millennials have grown up interacting as equals with adults, being invited to socialize regularly with adults even as children. Thus, these young people don’t view hierarchical barriers in the same way as members of prior generations, Wright says. So, distancing yourself as an “expert” won’t go far with a millennial.

This generation’s reliance upon technology often can create more work for you in preparing for face-to-face meetings. Because millennials are research-oriented, they won’t hesitate to confirm shared information online, even during meetings, according to Draper. You can pre-empt this multi-tasking tendency by offering your own research findings, sometimes before meetings.

You should be prepared for far more questions during those meetings than you typically might encounter with older clients. The “I trust you to do your job” stance goes out the window with millennials, who have witnessed the effects of two significant market downturns in recent years.

“They don’t want you to convince them based on your credentials,” Draper says. “They want it based on actual numbers and statistics.”

– Goals and dreams

You need to spend more time with millennial clients, Tsang says, in part because of where they are on the learning curve. Even relatively simple financial concepts must be explained in full. But there’s another reason: millennials’ attention to their work/life balance can mean a longer conversation about goals and dreams.

Wright contends that the generations are, as a rule, more alike than different. However, she says, the tension between ambition and well-being – that work/life balance – very much defines millennials. You need to be prepared to assist in goals that may not have been typical for prior generations.

Tsang, who was born on the cusp of the Generation X/millennial divide, says that her younger clients are “completely different” from her older clients in that there are no hard-and-fast financial planning templates for millennials.

It’s not just about retirement for them, says Tsang: “They have a lot of goals and a lot of ideas.”

For example, travel is a top priority for millennials, and many expect to take work sabbaticals throughout their career to pursue this interest – or to expand upon it with overseas volunteer work.

When working with millennials, you also should be prepared to work atypical hours. Because millennials are busy building their careers and sometimes juggling the responsibilities of young children, time can be tight for them. They may not be able to meet during typical office hours and, says Horwood, “We have to respect that.”

– Referrals

Often described as the “social generation” because of their proclivity for online disclosure, millennials might make one aspect of your business a lot easier: referrals. The sharing of experiences – while sometimes seeming to verge on overkill (Does the world really need another food picture?) – can make for a more referral-friendly climate. However, sharing experiences can be a double-edged sword; missteps with this group often become public knowledge quite quickly, cautions Joanne Ferguson, founder and president of Advisor Pathways Inc. in Toronto.

“If you have clients in that age range and you’re not adhering to what you said you were going to do,” Ferguson says, “they are very fast at telling people it’s not working.”

However, she adds, millennials also are more forgiving than previous generations. They are more willing to hash out a problem, discussing what went wrong and how it can be remedied, than clients from previous generations, who tend just to walk away.

Referrals seem to come more naturally from this group, Horwood agrees. Once a quarter, she hosts evening learning workshops (at both beginner and intermediate levels) aimed at deciphering financial planning for millennials. She finds that clients often bring guests – friends or family members who then might sign on with Horwood: “At one point, I had one millennial sign up and I had four or five ask me why I didn’t offer my services [to them].”

– Funky, cool events

Planning client appreciation or prospecting events aimed at millennials can be challenging because of this group’s busy lifestyle. Kilgour says her clients have the added burden of shift work, which complicates Kilgour’s ability to schedule events.

To address this hurdle, she aims for events that cater to clients’ downtime pursuits. For example, Kilgour’s firm teamed up with a local outdoor outfitter for a weekend, opening the doors early for Investors Group clients only and offering discounts and snacks for attendees.

Waxman plans to hold prospecting events that cater to the unique tastes of millennials. “We will be doing dinners for which we’ll rent out a funky, cool restaurant – not your standard steakhouse,” he says.

It’s important to make events stand out with millennials because people in this age range tend to have many personal and professional commitments.

Waxman also points out that although this demographic is known for its technological prowess, that doesn’t mean going “old school” is always a bad idea. For example, Waxman gives his clients small gifts with handwritten cards to mark milestones, such as a new house or a baby.

“In a generation of technology,” Waxman says, “those personal touches go a long way.”

© 2015 Investment Executive. All rights reserved.