Young Investors Don’t Want Advisors Who ‘Mirror Them’: Securities America

Gen X and Gen Y want experienced financial advisors and are willing to embrace their parents’ FAs, the IBD shares at confab

Think young investors need their advisor “to mirror them" in terms of looks and age? Think again.

In a session at Securities America's recent conference, a group of young investors told the assembled advisors otherwise.

“They really value experience,” Securities America Advisors President Janine Wertheim said in an interview. "And several work with their parents’ advisors and are not inclined to work with an advisor without much time or experience in the game. That’s a big deal to them.”

Independent broker-dealer Securities America says its recent national conference was its second best ever, as measure by attendees. The San Francisco gathering, held June 20-23, attracted 1,100 individuals; about half were advisors.

A session on how advisors can work better with Gen X and Gen Y investors gave the reps plenty of practical tools, and the group’s 24th annual event also featured a special session for advisors 40 years old and younger.   

At the session, a group of young investors listened to recordings of advisors describing what they do for clients. The investors gave their immediate reactions to the advisors’ thoughts.

The group of Gen X and Gen Y investors was diverse, with some married, others married with children, single or self-employed. Several already work with an advisor, while others invest on their own.

“One of the big takeaways was that these investors really connected and resonated with holistic planning and with advisors who talk about getting to know you, the client, and your unique circumstances,” Wertheim said.

Younger investors also don’t gravitate to retirement planning. “They’re very interested in augmenting their income for the next five to 10 years, and focusing on retirement is a turnoff,” Wertheim said. “They want to enjoy the now!”

Members of Gen X and Gen Y are not concerned about what type of broker-dealer an advisor works for or is affiliated with. “They don’t see a difference … and want individual relationships … and an advisor to look at [his or her] unique situation,” the Securities America executive said.

Plus, these investors want to be deeply involved in the planning process and educated about their investments, she says. “They really value face-to-face meetings vs. doing business online, and they value transparency when it comes to the costs of doing business with an advisor.”

Another way advisors can relate well to younger investors is by discussing real estate. “They want to know about where they should buy, rent or invest,” Wertheim said.

Next Gen Reps

To help Securities America grow its business with investors young and old, the broker-dealer has set up Next Gen Connect, a network for about 260 advisors under 40, and the IBD hosted a workshop on succession planning for about 40 members of this group at the national conference.

For the workshop, senior advisors like Rene Cordell of Wichita, Kansas, explained how they had grown their business. Cordell has made seven acquisitions in the in past nine years.

This is an important topic for the next-gen group, says Roger Verboon, director of practice succession and acquisitions. “They want to hear how succession planning and acquisitions can help them grow their business,” he explained during an interview.

“Cordell described how he had reached out to advisors looking to retirement … and the various steps to take when introducing yourself to more senior advisors, how to be a good succession partner, what the financing, valuation and technical side is all about and what’s given him confidence to do these deals,” Verboon said.

Junior advisors have to build up a pitch book to show and explain their value, he adds, noting that some younger reps had already completed small acquisitions.

It’s easy for advisors to get caught up in pricing issues and the down payment, Wertheim says. Securities America encourages them to focus more on the deal structure — what the cash flows will be over time.

John Jenkins of San Diego described to the younger reps how he had built a successful practice by developing a niche, working with CPAs for referrals, being confident in setting prices, sticking with them and delivering value to clients.

“The feedback I got was that the FAs were helped by Jenkins’ focus on their level of confidence … This is inspiring to the younger reps. Attitude is as important as technology,” said Verboon.

Securities America, which is owned by Ladenburg Thalmann (LTS), plans to host its next national conference from June 6 to 9 in Austin, Texas.

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