From the June 2014 issue of Investment Advisor • Subscribe!

7 Things Advisors Must Know to Win Young Male Clients

Men in their 20s and 30s don't act like women their age, or even like their older brothers. How advisors can understand, attract and retain today's young man

Seven things to keep in mind when you try to reach out to younger male investors. (Pictured: J.D. Bruce, Abacus and Brian Jones, CJM Wealth Advisers) Seven things to keep in mind when you try to reach out to younger male investors. (Pictured: J.D. Bruce, Abacus and Brian Jones, CJM Wealth Advisers)

As the accumulation years for boomers continue to dwindle, it's more evident that future growth for advisors will depend on how well they can cultivate their successors in Generations X and Y.

We’ve examined the psychology of younger generations in general, and women in particular, in previous articles, but what about Gen X and Y men? How can advisors build trust with younger men? When we sought advice from experts who have worked with this group, we learned seven surprising facts.

1. Younger Than Their Age

“Men in their 20s and 30s generally have a harder time moving into their adulthood than females of the same age,” said Cam Marston, author of “The Gen-Savvy Financial Advisor.” “Advisors have to realize that many of these males are going to be seven years younger than their biological age suggests.”

Marston, president of Mobile, Ala., consulting firm Generational Insights, said that younger men under the influence of delayed development believe they are “bulletproof and that beer is food.” He added, “So that gives the advisor a real challenge, being with someone who measures their future in hours, not decades.”

2. Seeking Short-Term Results

How do you plan for the future with a young man who thinks in terms of immediate gratification?

Marston suggested telling these clients, “‘There's peace of mind in developing a plan for your future, whether it extends over three months or two years.’ So the young investor might think, ‘I don't have the money, but I have a plan for the money.’ That not only satiates the need for instant gratification but will ease some anxiety and stress.” He also advocated creating an agenda with items that can be checked off during the course of a meeting, giving the client a sense of immediate accomplishment.

Investment Advisor columnist Angie Herbers, a practice management consultant, has also noticed differences in working with young men. “The baby boomer generation wanted to have quarterly or annual meetings,” she said. “Younger women still like that structure, that consistency, but younger men want you to be available when they need you.”

This has to do with the way they were raised, she explained. Accustomed to finding anything they want or need by checking their phone, they have the mindset that they should be able to get any information they need immediately.

“If you want to attract younger men, you have to be able to compete with how their brains work,” Herbers said. “It doesn't mean you have to drop everything to talk to them or answer their text messages. You just have to provide systems that allow them to get information when they need it.”

When there's something they want to know, she said, the first thing they normally do is Google it. If you teach them “how to use a bucket of technological tools you’ve provided, then they don't have to Google and they feel loyal to you,” she suggested. These tools might include anything from an electronic worksheet if they’re struggling with cash flow to guidelines for starting an education account.

Younger men's short-term focus tends to change with age and responsibility. “Anyone who has young children will begin taking a longer view of the future,” Marston advised. “But in their 20s and early 30s, they’re still comparatively short-term-focused.”

3. Tech-Savvy, but Favoring Face Time

Abacus Wealth Partners in Los Angeles deals with many more young clients than the typical RIA because they’ve eliminated investment minimums.

One of the eye-opening comments we heard from Abacus President J.D. Bruce is that younger clients are not necessarily using technology to organize their lives better. “Sure, young people are perfectly happy to stare at their phone and are more likely to use social media like Twitter to communicate with each other,” he told us. “But that doesn't translate to being better able to log in to review their quarterly statements or use electronic signatures to sign paperwork. Many of my 60-year-old clients are happy to sign documents electronically, but my 20-year-old clients just want to talk on their phone because their email inbox is a disaster.”

An April 11 ThinkAdvisor.com article reported that Michael Liersch, director of behavioral finance at Bank of America Merrill Lynch, said during a SIFMA private wealth conference that younger investors prefer face-to-face meetings with their financial advisors. Technology can augment these interactions but does not supplant them.

In other words, you probably can't Twitter your way into a new relationship with a younger prospect. It's going to take patience and education, with much of it in person. (See online sidebar, “Young Man, There's A Place You Can Go.”)

4. Catching Up With Women

Bruce has noticed another major difference between men in their 20s and those in their 30s: “The maturity level of men in their 30s is vastly higher, and the desire to buckle down and save and invest is much higher,” he said.

That's encouraging for young women in a relationship with a 20-something guy. In fact, advisors seeing a couple in their 20s may find that it's the woman who takes the financial lead. This represents a real generational shift. “In general, older women are more likely to have been told as children that they wouldn't need to understand money since they’d have a husband to deal with it,” said Bruce. “Younger women haven't been given that same message. They’re expected to be as competent as their brothers, if not more so.”

5. Not All the Same

“We hear that Gen X is lazy and Gen Y feels entitled,” but “they’re not all like that,” observed Brian Jones, executive vice president of CJM Wealth Advisers in Fairfax, Va., and author of “Getting Started: The Financial Guide for a Younger Generation.”

For example, Jones described a young man he had recently met. “His grandparents were the initial relationship,” he explained. “His parents are also clients of mine. He's in his third year of college, and I’ve sat down with him twice in the last year. We’ve discussed investments as well as other financial planning options. He has more than enough money put aside to finish his education. He says, ‘My grandfather has talked about this so much that he's convinced me I need to start now.’ That young man is thinking about his financial future, saving and setting money aside. He's a great example of Gen Y members who are doing the right thing.”

6. Into Meaning and Life Balance

Accumulating wealth for its own sake is of little interest to most younger men, according to Barbara Feinberg, a psychotherapist and life coach in Cleveland Heights, Ohio, who specializes in the impact of wealth on relationships. “There is an emphasis in younger men on values, on lifestyle choices,” she said. “We’re talking about educated and privileged young men, upper middle-class young men, who seem to me to view money as a way to create a life that has meaning. And that meaning is embedded in their values about the world.”

Feinberg believes that these young men are not as invested as their parents and grandparents were in the idea that money equals happiness or success. “They’re much more interested in social and economic justice, rather than acquisition,” she said. “I think this more meaning-based worldview is an enormously important distinction.

“The other critical thing is that they’re a lot more interested in creating a life with work/family balance,” she went on. “These issues apply in spades to inheritors of wealth. They care about doing good, about economic and social justice and giving back.”

That's why many younger men are attracted to socially responsible investing. “They have more of a world perspective, having traveled much more widely than their parents and grandparents did at their age,” she said. “They think globally. They’re concerned about poverty, about climate change and about what kind of world they’ll be leaving to their children.”

Marston emphasized the importance of asking a young investor what he values. “The millennials are a cause-driven generation,” he pointed out. “Align their investments with causes that they care about, and that will create loyalty to you, to the investments and to the process.”

7. Different, but Not That Different

These are very general statements, Bruce and Jones both reminded us. Every individual is different, so using statistics to generalize what someone is like can mislead you. You need to make the time and effort to listen to them, to their needs, cares and concerns.

“Ultimately,” said Bruce, “all my clients of whatever age or gender just want the same thing: to make better decisions about their money.”

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