Why working with younger advisors could benefit both retiring and millennial clients
For the majority of clients, there’s a lot of comfort to be had from having an experienced wealth advisor behind them. But young guns who are comparatively new in the industry also add plenty of value to the relationships they build.
“A few years ago, one might have argued that younger advisors grew up with technology, and are able to leverage it very well, which makes them well equipped for the way the industry is moving,” says Jordan Rausch, wealth advisor at Nicola Wealth. “But I think COVID has helped to level the playing field as everybody had to brush up on working remotely using different tech tools.”
Read more: Ready or not, advisors must answer clients' new digital expectations
Even with their tech edge blunted, Rausch says young advisors can be valuable partners to clients from both older and younger generations.
Among clients in their 50s and 60s, there may be a natural preference to trust people from the same time and situation, which could be an obstacle for those working with a fresh-faced advisor for the first time. But once they get past that initial stage, Rausch says, they can appreciate other advantages that a younger professional can bring to the table.
“Clients from the Baby Boomer generation with a lot of wealth may be thinking about retiring and selling their assets, but might not necessarily consider that advisors from their generation are doing the same thing,” he says. “They're realizing that some grey hair is good, though they might also want that younger, fresher face that's going to be with them the whole time.”
With potentially several more decades of life in front of them, Rausch says mature clients can benefit from building a relationship with a younger advisor who can help set their plans for retirement and beyond in motion, and keep those plans on track.
For the younger crowd of clients, Rausch highlights the need for guidance as they receive a torrent of financial information from various sources. The extreme example, he notes, comes from content served up through YouTube or Tiktok videos that explain financial concepts or strategies.
Read more: How advisors can reduce the influence of 'finfluencers' on clients
In survey conducted by BMO earlier this year, 33% of Gen Z respondents and 22% of millennials said they use financial influencers and social media to make investing decisions. In comparison, just 7% of Canadians over the age of 55 said they turn to such sources.
“The reality is that a lot of the content on those platforms is entertainment, so they’re meant to be compelling and to capture your attention,” he says. “A video may not be correct, but it seems to have that aura of validity because of the presentation and production values put into it.”
Even if a video has accurate information, there’s still the question of its validity with respect to a person’s specific situation. Much of the education floating online isn’t made for the Canadian audience, but it can end up on the feeds of young people in Canada looking for information on real estate or tax planning.
For those just setting off on their wealth journey, applying advice without considering the nuances could lead them down the completely wrong path. While financial professionals should respect younger clients’ need to find answers by themselves, Rausch says advisors should be there to offer a guiding hand when necessary.
“They may be coming to us with a certain idea, but we need to recognize that what they know already may not be complete,” he says. “We need to be ready to guide them a little bit further down the road to reach the right answer for them.”
