The start of a new year means different things to everyone: a new start, new resolutions, a new budget, a clean slate, etc.
To most independent advisory firms, it’s a time for implementing new plans and strategies. And most of those plans involve growth in one form or another, which inevitably means hiring more people.
With an industrywide talent shortage, the New Year’s hiring binge will make it even more difficult to find solid workers.
For many firms, hiring experienced Generation X advisors and support personnel will be prohibitive, and that means they’ll have to rely on millennials to help them achieve their goals.
Millennials tend to be very different from Gen Xers and baby boomers.
But to make growth plans work, owner advisors from those older generations are going to have to embrace those differences; to create jobs and environments that will attract millennials and encourage them to stay.
Here are some key strategies to consider:
1. Understand millennials’ worldview.
While baby boomers were looking to change the world politically, and Gen Xers were/are focused on making money, millennials are looking for purpose in what they do, which translates into meaning, responsibility and lifestyle.
For them, money isn’t everything; it’s just a means to an end. And they see taking care of themselves as the first step in solving other problems.
The good news here is that the services provided by financial advisors to their clients fits nicely into millennials’ sense of purpose.
Be sure to focus on that in your recruiting efforts. But also remember that lifestyle and physical and mental health are more important to them than money.
This means perks such as flextime, working from home and vacation time will be much more attractive to them than larger salaries.
And if you’re clever and flexible, these can work to the advantage of your firm too by keeping overhead low while increasing productivity.
However, if you’re too stubborn to accommodate them, you’ll fail to attract the help you need, while the turnover rate for the few millennials you do attract will be astronomical.
2. Take a ‘Karate Kid’ Approach.
Millennials are information junkies. Their comfort with technology makes them research wizards.
This can be very valuable for keeping up on the latest word in, well, everything. Don’t hesitate to use them to fill in knowledge gaps and research new initiatives.
But it also creates a blind spot in millennial thinking: They often fail to see the value of experience — particularly advisors’ experience with clients. Therefore, turning millennials into professional financial advisors will require a bit of skill and finesse on your part.
To me, the best example of the solution is Mr. Miyagi, who trained the Karate Kid in the movie of the same name: He emphasized the simple motions of “wax on, wax off.”
It doesn’t matter who said it; millennials will understand the analogy of learning the basics first.
In the advisory business, this analogy applies to everything from financial planning to portfolio construction, management and client communications.
The key is to tactfully explain to young advisors that learning the basics in these areas requires experience, not just research.
Next, create the programs that will give them that experience. And keep reminding them that the “wax-on-wax-off” phase will pass.
3. Don’t ignore the “snowflake” syndrome.
Baby boomers challenged the “Ozzie and Harriet” generation and took a lot of heat for it. Gen Xers have had to live in the shadow of the baby boomers their entire lives.
But millennials have been told that they were all winners since they were in diapers. Therefore, it shouldn’t come as a big surprise that they don’t take criticism well — after all, they’ve never had any.
Before you go off on a rant about “teaching them what the real world is like,” ask yourself this: Is it more important to change the world view of a couple of millennials or to run a successful advisory business?
Take a deep breath and focus on how you’re going to get the help you need to grow your firm. If you need millennials to help you do it (and you most likely do), then you’re going to have to communicate with them in a way that reaches them, rather than turns them off.
This essentially entails handling them with the proverbial kid gloves. No harsh criticism, no ranting, no tirades. Work with them the way you would with your children or grandchildren. Be nice, be patient, be tolerant.
Remember, your goal is to get through to them so you can teach them what they need to know to be good advisors or support people. And because that’s what you need, make it a win-win.
Baby Boomers grew up on “All the President’s Men.” Gen Xers grew up on “Home Alone.” Millennials grew up on “Toy Story,” which featured the song “You’ve Got a Friend in Me.” Be their friend and they’ll help make your business successful.