I admit that I didn't start out going after the younger demographic.
In fact, my early years at Morgan Stanley taught me to build a book of business based on investable assets, so if a potential client didn’t have a healthy six-figure investment account, they weren't a fit. Not surprisingly, those with sizeable assets were typically older, and my client base followed suit.
At the time, I was fresh out of college, just six months’ shy of the impending recession and, as trained, I took on older clients to meet my sales goals. Although this practice continues to work for many, I soon learned that it wasn't going to be a viable long-term solution for me.
After five years battling through the Great Recession with the brokerage giant, I transitioned into the independent world, taking a job with a boutique registered investment advisor firm.
It was then that I started to notice a concerning trend: my book of business was aging. I had more clients taking money out than putting it in.
Given my age and expected time left in the business, I recognized that I needed to start injecting youth into my practice. In 2014, I left the RIA and launched my own firm, Define Financial, an independent, fee-only practice in San Diego.
Now it was up to me to build a firm that could resonate with younger successful professionals and attract lifelong clients. To create a compelling offering and appeal to this demographic, I chose to focus on technology, fee structure, branding, marketing and a strong online presence.
Technology was a given. I knew that if I wanted to appeal to the younger demographic and differentiate my practice, I needed to implement the right tools.
So, I invested in the best financial planning, customer relationship management and performance reporting software. I also implemented a digital newsfeed on my site to create a single location for clients to access articles we think are worthwhile.
To attract younger clients with healthy incomes but fewer investable assets, I favored a monthly retainer fee over a traditional asset-based fee model. This allowed me to turn the conversation from "How much money do you have?" to "Are we a good fit to work together?"
Investing in Business Development
I also saw an opportunity to connect with younger clients through branding and a compelling online presence.
As branding wasn't my strength, I invested a sizable sum into a branding agency to bring the vision to life. This began with a logo and business cards, and a common look and feel for our office, website, and corresponding social-media outlets.
It has been noted that a typical advisory firm spends a mere 2% of revenue on all marketing and business development activity.
But according to a 2014 Fidelity study on clearing and custody, advisors who outspend other advisors on business development see substantially more client growth.
To differentiate my practice and build brand awareness, I implemented content marketing strategies, such as hosting a regular blog and publishing videos on our site. I also invested in public relations and advertising and discovered ways to leverage search engine optimization and social media to increase visibility and capture targeted leads along the way.
Today, while Define Financial doesn't focus solely on young professionals, our approach has allowed us to significantly build our Gen X and Gen Y client base. In fact, this demographic has been the fastest-growing source of clients for Define Financial to date.
Taylor R. Schulte, CFP, is founder and chief executive of Define Financial of San Diego.
This story is part of a 30-day series on smart ways to grow your practice. It was originally published on July 23, 2015.
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