Some Fun Statistics
• Gen X: Born 1960-1979 (35-54
years old)
• Gen Y: Born 1980 – 1999
15 to 34 years old)
(Ages
• Gen Y / Millennials are largest
generation in history
• 92 million Millennials vs.
million Baby Boomers
76
• $30 trillion will pass from Boomers to Millennials over the next 30
years
• 42% of NextGen investors prefer to work with someone within 10
years of their own age
Traditional Approach to Gen Y
“Pink It and Shrink It”
Working with Gen Y requires a
complete redesign of your firm’s
existing service model
What Must Change:
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Financial planning process
Advisor leading the meetings
Investment management
How you get paid
Meeting virtually
Technology
Marketing
Financial Planning Process
Less of This
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Extensive estate planning
High level tax planning
Social security
Retirement income
Time-intensive
investment process
More of This
• Debt management –
student loans, mortgages,
etc.
• Lifestyle design
• Starting businesses/side
hustles
• Mini-retirements
• Travel rewards
• Developing savings
habits
How You Get Paid
• Death of AUM – It only works for people
with money
• How many bills do you pay OTHER than
monthly?
• Why wouldn’t you pay your planner
monthly?
How You Get Paid
• Typical fee structure:
▫ $1,000 Upfront
▫ $100 - $200/month (or more) depending
on complexity
▫ 1% of AUM on any assets managed
• You should also offer a one-time service
▫
http://www.kitces.com/blog/why-spend-money-on-marketing-when-you-canget-paid-to-market-your-advisory-firm/
Managing Investments
• Most firms simply
can’t manage
smaller accounts
due to timeintensive process
• Consider a TAMP such as Betterment
Institutional
▫ Outsource most of the work for .25%
Meeting Virtually
• Think about your
peer’s typical day
▫ When do they have time to come to your
office?
• All you need is Skype, Google Hangouts,
or Join.me
Technology
• Budgeting software
▫ Guide Financial,
Balance Financial
• Cloud based performance reporting
▫ Blueleaf
• Cloud document sharing
▫ Box, Dropbox, Google Drive
• Electronic Signature
▫ EchoSign, DocuSign
Advisor Leading Meeting
• 42% of NextGen investors prefer to work
with someone within 10 years of their own
age
• Your peers want to work with you
Marketing
• It all starts online
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Blog
Social media
Podcasts
Newsletter
Search Engine Optimization
• This all requires a great website
Is Gen Y Profitable?
• Assume 100 Clients with
$50,000 investments $1,000 upfront, $150/month, 1% AUM
• Income
▫ $100,000 of upfront fees
▫ $180,000/yr recurring revenue
▫ $50,000/yr AUM revenue
• Expenses
▫ TAMP: $12,500
▫ Junior Advisor (YOU!): $60,000
▫ Additional Technology: $10,000
▫ Online Marketing: $3,000