Convince Gen Y to get advice

Many advisors want clients who’ve already amassed wealth. But for the longevity of your business and future growth, it’s important to spend time prospecting young clients.

Not convinced? This story might change your mind.

A 25-year-old prospect came to us with $40,000 in savings. We discussed his career as an engineer, and his goals. The senior advisor on our team was friendly, but after the meeting didn’t want much to do with the young kid.

Having been in the industry for four years, I took the opportunity to work with him. A year and a half later, I’m also advising his wife, and their assets under management have grown to more than $178,000.

Unfortunately, not every young prospect will contact you. In fact, lots of Gen Y types think they can go it alone, and learn to invest by reading personal finance blogs or watching YouTube videos.

How do you convince them they need advisors?

• Find people predisposed to wanting advice

  If a prospect’s parents have an advisor, she’s more likely to understand the importance of having one herself. So connect with children of current clients. Ask if their kids need advice and hold educational seminars for twentysomethings.

  Here’s how we did it. Members of a family have been clients for years. The parents have $500,000 with us. Their sons grew up and opened accounts early on, and made regular, small deposits.

  The elder son, who’s now in his mid-30s, became a radiologist. Within a few years, his accounts have grown to just under $800,000 because his income has grown exponentially.

  The other son doesn’t have the same income, but his assets have grown to $95,000. As his income increases, we expect his account will too—at an early age, we instilled in him the value of adding funds each year.

• Learn what’s important to them

  Even though they’ve come to your office, they might still be skeptical. So prove that you can help solve their problems by learning as much as you can about them. Ask open-ended questions, including:

  • What are your professional aspirations?
  • What are your challenges?
  • What keeps you up at night?
  • What kind of legacy do you want to leave?
  • What would you like to provide for your family in the long run?
  • What has your experience with money been like?

  Asking these questions will make them think harder about how finances impact their lives.

• Show why they need plans specific to their goals

  Explain how you’ll make their lives easier. For instance:

  • Saving taxes – Self-employed clients typically have to pay taxes in a lump sum each April (unless they paid in instalments). That’s painful. Show how you can help reduce this bill.
  • Emergency fund – Coming of age in a shaky economy, young people know they need to plan for financial bumps, but may not know how. Teach them budgeting to ensure unexpected occurrences won’t lead to them dipping into their vacation or down payment savings.
  • Estate planning – One of our wealthiest clients explained she didn’t have a will or a POA. She came from a place where such things didn’t exist. Explain that you’ll help protect their children and other family members should anything horrible happen. AE hanna

Caroline Hanna, investment advisor, BA, CIM, National Bank Financial Wealth