Is Gen Y worth the effort?

There’s a lot of discussion around the unique needs and preferences of Gen Y. Is it worth the effort to get them into your book?

The case for “No”

Ideally, you want 100 to 250 client households. They should have at least $250,000 in investable assets. Gen Y prospects don’t fit because:

1. Low assets: Even if they have a good job, these twentysomethings are at the bottom of the career ladder and may be carrying student debt. They have no serious money and won’t for some time.

2. Short-term focus: Gen Y is saving for a down payment on their first homes. Long-term investments aren’t currently suitable.

3. Advice should be free: They grew up with smartphones and the internet. They see ads for online trading at $5.00 per transaction, and financial advice abounds on websites. They may think, “I like you, but why should I pay you?”

Read: Can a robot replace you?

4. Uniform service: If a client works with an advisor she assumes everyone gets the same level of service. You can’t explain afterwards they are on a lower tier.

The case for “Yes”

You’re building your business with an eye towards future growth. You see opportunities others don’t.

1. Related: You have a big client and he asks you to help this Gen Y granddaughter get a start with investing. You want to keep your big client happy.

2. Referred: She is a young executive at the firm your big client owns. The client suggests the Gen Y prospect call you and open an account. You do it.

Read: Why you should target Gen Y clients

3. Influencer: Gen X and Gen Y know their way around social media. Your Gen Y friend has lots of followers, and she talks up good experiences. You’re bound by confidentiality, but she’s not.

4. Cash flow: They may not have large nest eggs, but they earn a bundle as a doctor, lawyer or accountant. They can write large monthly checks for dollar-cost averaging investing in mutual funds. Don’t forget bonuses.

5. Insurance as a problem solver: Providing for their young families is a priority. What if something happened to them? Life insurance is often most affordable when people are young.

Read: How tech helps Gen Y with finances

6. Wealthy parents: Do a good job for the children and their parents will be impressed. They may be your next new clients.

7. It’s your world: You’re an advisor in your 20s. All your friends are Gen Y. You get together constantly and text when apart. They respect you and think your job rocks. They think investing is confusing and value your advice.

8. Long-term thinking: Your Gen Y friend is a new doctor completing her residency at a local hospital. She may not have much money now, but will be earning substantially more in a couple years. Then she’ll be everyone’s ideal prospect. Get in early.

“Maybe”

1. Extended family: You come from a large clan. Some are wealthy, others less so. You are the only financial professional and your objective is to establish yourself as the advisor who handles money for all family members. Do you seek out the less wealthy twentysomethings to establish your territory?

2. Heir apparent: Your Gen Y friend will inherit a substantial amount someday. Are you willing to wait?

3. Establishing a niche: Your focus is engineers or medical professionals. Your sweet spot is rollover business. Can you afford to turn away the small business that comes your way while still expecting the big rollovers?

Read: 5 ways to understand millennial clients