INDIANAPOLIS -- While there is indeed a large generational wealth transfer in the works, that alone shouldn't be the only reason advisors want to work with Gen X and millennial clients.

Instead, advisors choosing to work with next gen clients should actually want to do so, XY Planning Network co-founder R. Alan Moore told attendees at a session during NAPFA's Fall Conference.

"These are real people, who are real clients, who need real help. Yes, there will be a wealth transfer," Moore said. "Please don't work with them based on the fact that their parents are going to die at some point. It's a terrible business model."

Instead, Moore suggests that advisors who have no interest in working with the next generation don't - "Don't 'should' yourself," he said.

"You can if that fits your goals and your vision of where you want your business to be. If not, it's cool. It's not offensive," he said. "You have your own focus, that's okay. Don't do this just because you think you're supposed to."


Far too often, advisors fall into the trap of oversimplifying their processes when it comes to working with next-gen clients, Moore says. Simply adding technology does not mean millennials are going to take notice. He calls this "the Happy Meal approach," suggesting that advisors tend to simply offer a lesser version of their services to their younger clients rather than tailoring their approach to the clients' needs.

He compares this approach to planning to the outdated "pink it and shrink it" marketing strategy: simply making things smaller and pink does not necessarily mean women will want to buy them.

"Just because you trim it down and call it millennial-focused and maybe throw in some technology does not mean millennials are going to buy it," Moore said.

One of the biggest hurdles facing many advisors is the AUM compensation model, he said. Because many next-gen clients don't necessarily have assets, advisors who choose to work with them often end up giving away financial planning for free.

"I would contend that a monthly fee is the future of how we get paid for financial planning," Moore said. "All bills are monthly. Why isn't financial planning?"

In response to arguments that advisors can't work with clients with smaller assets because it is not efficient to do so, Moore suggests using a robo platform to help keep track of next-gen clients' investments.

"This is where robo advisors will help us streamline our process," he said.


Moore says attitudes surrounding working with millennial and Gen Y clients need to change. And because 42% of next-gen investors prefer working with someone their own age, advisors may need to set up situations where younger advisors in their practice can thrive. It is not unreasonable for an older advisor who is a social security expert to have a full grasp on student loan challenges, for example.

"If you're in your 60s, I would contend you're not the best advisor to meet with clients who are 32 years old," Moore said. "It's okay to let a younger advisor do that work. If you want to work with younger clients, you kind of need that younger advisor on staff to do the work."

That said, bringing in younger advisors recruits a completely different approach to how a practice is run. Moore cautions that advisors wanting to put new talent on the same path they experienced should think differently.

"It's not the path they need anymore. You're going to have to let go of control. You're going to have to let them meet with clients," he said.

With new talent coming out of comprehensive financial planning programs in colleges and universities around the country, Moore says the next wave of talent has a leg up on experience.

"Give them the opportunity to work with their peers from day one," Moore said. "I don't know if people have embraced how rockstar the talent coming out of these degree programs is."

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