Being a Millennial Financial Adviser

If a client at age 65 is hesitant to work with an adviser who is much younger than they are, what’s going to happen in 10 years? Or 20 years?

PLANADVISER and Hartford Funds sat down to discuss some upcoming “roundtable research” the investment services firm is putting together, looking specifically at the experiences and expectations of Millennials working in the financial advisory field.

Hartford Funds plans to publish a white paper on the topic soon, but in the meantime, the firm’s director of strategic markets, Bill McManus, highlighted some of the preliminary findings.  

“Our interest in this topic really goes back to our relationship with the MIT Age Lab,” McManus tells PLANADVISER. “We have noticed they have focused in some important ways on the Baby Boomer demographic, yet what we’re finding is that a lot of their research really ends up touching directly on Millennials, and the other generations as well. The generations all influence one another, particularly when we think about the upcoming transfer of wealth from Boomers to Millennials.”

Against this backdrop there is a slowly growing cohort of Millennials who are themselves stepping into the advisory industry—particularly among the older slices of the generation, roughly ages 25 to 35. McManus explains that Hartford Funds recently brought together a group of stand-out young advisers, asking them a wide variety of questions about how they got into the industry and what their aspirations are.

“One message we heard loud and clear: The barriers to entry have shifted and in many cases have gotten more difficult, so it’s not exactly an easy business to get into at the beginning,” McManus says. “Those who are working in the industry are concentrated in firms that recognize that they need to add younger talent and are putting in good processes to make that happen.”

Not a big surprise, Hartford Funds found Millennials feel one of the most important ways firms can ensure recruiting success among this age cohort is to adopt a team approach, at least at the beginning.

“Millennial advisers told us they see a lot of benefits from mentoring and working alongside an experienced adviser as they start to build their own book of business. It benefits both older and younger advisers, we believe,” McManus adds. “Older clients wouldn’t necessarily want to work with someone in their 20s and 30s, but with the team approach it works better and really makes that transition easier.”

NEXT: Winning clients and building business as a Millennial adviser 

Also not a big surprise, Millennial advisers cited the preconceptions of older advisory clients as one of their top hurdles to building sustainable and successful books of business. Many of the older Americans who have substantial personal assets simply do not want to work with an adviser who may be multiple decades younger than they are.

“This is a very commonly cited hurdle to successfully growing business,” McManus explains, “but while it is common it’s not necessarily the rule. Many older Americans are also perfectly willing to do this, especially when it starts with a team approach where an older, trusted adviser is involved in a transition period. Millennials can benefit from the backing of a trusted mentor, and from the halo benefits of a advisory firm brand.”  

One of the most effective arguments is also the most logical, Millennial advisers say. If a client at age 65 is hesitant to work with an adviser who is much younger than they are, what’s going to happen to that client in 10 years? Or 20 years? What if the individual lives to be 90? Will they demand an 85-year old adviser?

“And if you think about the reverse argument, it makes a whole lot of sense,” McManus adds. “If a 65-year-old takes on an adviser who is in their 30s, say, that will leave decades of time for the relationship to grow and develop. I can tell you from sitting down with our roundtable of advisers that these Millennial advisers already have what it takes to drive great retirement outcomes. They also have a lot of empathy and personal experience with their own parents and grandparents they can rely on when building out these relationships. Personal stories go a long way.”

Of course, Millennials advisers also have turned their attention to prospecting and securing clients their own age, both for the wealth they have now and the wealth they will earn and inherit in the future.

“This effort relies a lot on robo-advice technology for efficiency and scalability, Millennial advisers tell us,” McManus concludes. “But what is perhaps most interesting is that, even among the youngest generation of advisers working right now, the importance of personal relationships was constantly cited. Millennial advisers expect this to remain a relationship-driven industry, even as technology plays a bigger role as well.”