Why work to attract younger clients to your practice? ”The people with money are usually the older ones – they’ve had more time to accumulate it,” says Lewis Altfest, head of Altfest Personal Wealth Management, a fee-only financial management firm based in Manhattan. “But there are young people with some money; they may have inherited it from the older ones.”
Altfest, who does work with a number of clients in their 20’s and early 30’s, says to draw younger people to your practice you have to establish the right relationship. ”When someone 30 comes in to see an advisor who is 60, they’re thinking this guy is the right guy for my parents,” he says. “Some of them may be attracted to your experience, but many of them want to speak to people their same age.”
To accommodate them Altfest’s firm hires younger advisors, who themselves are less experienced. But they can relate and communicate better with younger clients, setting them at ease.
“Young people in general are less interested in investing and financial matters,” he observes. “They’re less knowledgeable. But they may be looking to take a flier.”
To attract and educate them, his firm holds periodic seminars on investing rudiments. The lure of basic topics draws them in, such as ‘what should you do with your 401(k)?’ and ‘What is a bond?’ “They may be thinking ‘I should buy bonds now and let interest rates go up, and I’ll get higher rates,’” he says. “They really don’t know about these things.”
Altfest’s firm, which works with a number of affluent clients who are getting on in age, emphasizes developing relationships with the next generation of potential clients who will inherit the money. “They don’t know you,” he says, “and you need them to know who you are—otherwise there’s a good chance you’ll lose the money.”
Another effective way of attracting younger clients, he says, is to have the younger advisors you’ve hired to work with them go out and capture new clients based on their high school, college and alumni relationships.