Generation Y: The Evolving Financial Planning Practice

Gen Y is a large and increasingly affluent segment of the population.  As the number of clients under 40 in my practice continues to grow, I’m noticing clear themes emerging about what this demographic is looking for.  Interestingly, they have needs which are really quite different from my clients who are 20-30 years older.  I created a list below which summarizes some of the messages I’ve been hearing from my Gen Y clients:

Regarding Communication:

  • Don’t break out a pen and paper for an initial meeting.  We are a very electronic demographic, preferring to bring a phone or tablet with data on it and/or e-mail PDF documents.  Any data gathering by financial planners should be done via online questionnaires and other information gathering software.
  • We like our fee structure to be abundantly clear.  When possible, post your exact fees on your website, including your fee for a one-time financial consultation, your fee for a financial plan, or your annual asset-based fee if we are asking you to manage a portfolio.
  • E-mail me.  Don’t call me unless your question can’t be answered by e-mail.
  • I can live anywhere in the country and my advisor can live anywhere in the country.  Our contact may be somewhat frequent but it doesn’t need to be face-to-face.  If need be, we can Skype or Facetime.

Regarding Investing Themes:

  • Based on what I’ve read over the past few years, more passive strategies seem to cost me less money and outperform active strategies.  Let’s go with that if possible.  I don’t mind paying a fee for good financial planning and help with constructing and overseeing an investment portfolio.
  • I take Social Responsibility more seriously than my parents and grandparents.  I may prefer not to own stock in companies which are environmentally destructive, damage the health (such as large tobacco firms) or any other corporate culture which is notably controversial.
  • You may suggest that I should own 90% stocks because I’m 35 and investing in a qualified plan with a long time horizon.  However, I truly value my liquidity and would rather keep extra cash on hand and dip my feet into the market slowly.  I grew up watching the tech bubble inflate and burst and the subsequent housing crisis so I’m not into taking on huge amounts of risk with my capital just yet.

If we read through the lines on many of these observations, they boil down to greater efficiency in terms of conserving time, energy and money.  The demand for greater efficiency by younger clients can easily translate into greater efficiency for the advisor as well.

In order for an advisor to maintain and grow market share with the upcoming generations, they must run a business which appeals to the changing needs of those clients.  Otherwise you may find yourself losing business to some of the online platforms out there which are grabbing a slice of the market.

As always, feel free to e-mail me with any questions or concerns.
Russell Bailyn

Vice President

Wealth Management

Premier Wealth Advisors LLC

14 E 60th St, #402

New York, NY 10022

P: 212-752-4343 *231

 Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.

“This is not indicative of all Gen Y clients, as individual circumstances to vary according to specific needs.”

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