Clients in their 20s, 30s and 40s provide some unique challenges, but can be extremely rewarding to work with, according to Rebecca Schreiber, a certified financial planner at Solid Ground Financial Planning in Silver Spring, Md., who specializes in serving younger clients.

Young clients are “looking for a more transparent process,” than their elders, Schreiber says. They want to know more about the planners, and how they do business, and they are well aware of scandals and problems involving financial firms that have been in the news in recent years.

Additionally, their comfort level with technology and the wealth of information that is available changes their needs as well, she said.

“Because they have so much public information available to them via the Web, they’re not interested in what they can do, but in what they should do,” Schreiber said. These younger clients are busy with careers and families and they consider themselves very informed about products and market trends, she said. What they want is an advisor who can provide clear strategies that they can understand without having to devote a lot of their own time and energy.

One of the big differences when planning for younger people is “that they’re more unknowns than knowns,” she said, as opposed to planning for a couple in their 50s who have already established their family and careers. With younger people you may not know if how many children they will have, or if they will have none at all. Careers can change, or people may decide to go back to school. Some will never marry while others will marry and divorce several times. Others may face the prospect of having to care for elderly parents.

  The clients Schreiber says she meets may be “not married but want to be. Not parents but they want to be. These are all elements that significantly effect the financial plan.”

Because of these unknowns it is important that planners who work with younger people “create a plan that is very flexible,” she said. They cannot be locked into certain types of products because their life can change too much, she pointed out.

Of the clients she serves, Schreiber said, Generation X, generally considered people born in the late 1960s and through  the 1970s, are often the more confident and knowledgeable, though they still need a lot of guidance. “They know what they want on a grand scale, but not on a micro scale.”

More worrying, to Schreiber, is the generation behind them.

“I’m concerned about the long-term financial health of Gen Y,” she said. This cohort – generally accepted as people born between after
1982 through the mid 1990s – have seen a lot of financial turmoil in their life and are generally less confident and less willing to take risk than older generations, Schreiber has found. “Their so scared and they’re investing like little old ladies,” she said. 
Unfortunately, that type of extremely conservative strategy can only hurt them in the long run, when it comes to providing for the future.

For the most fearful of her clients she recommends baby steps – small changes to their behavior, perhaps a reallocation of the investments in a 401(k) plan from Treasuries to higher-yield bonds.

             “Most of us actually get our financial culture from our parents,” she said. Generation X was able to see their parents grow and prosper during their childhood years, even if lean times came later. Generation Y, on the other hand, is watching their parents go through one of the toughest financial times in recent history and that can be daunting for young people trying to find their own way.

“Financial education is very close to my heat, which is why I go to the trouble of working with a difficult crowd,” she said, such as Gen X and Gen Y. She charges a flat fee for her work because so much of her advice for these kinds of clients is on assets she does not manage, such as 401(k)s and other retirement vehicles.

Another issue she comes across is that even with the large amount of information available now about financial products, most of what people find on the Web is written by a lender or someone selling a product, so it is not impartial. It can be hard for clients to sort out what to believe, which is why they turn to fee-based financial advisors for unbiased help.

Schreiber says she reaches out to these younger clients in a range of ways. She works with non-profit organizations that provide financial counseling, and she’s worked with the Department of Labor on a financial education program. But most of her clients come to her via word of mouth. Perhaps surprisingly, she said, younger clients are eagerly looking for good advisors to help them manage the assets they do have and grow them for the future.