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Practice Management > Building Your Business

4 Things Millennial Advisors Should Know Before Joining an Older Firm

By Angie Herbers

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Let’s talk about the other side of adding millennials to an established advisory team: What millennials should consider when thinking about merging their existing business into an older existing firm, or simply joining one, to attract and work with more millennial clients.

If you are a millennial weighing a move, consider these steps:

1. Remember that you are the “expert.”

Unlike Generation X, who basically want to be like the baby boomers — but with better technology and cooler clothes — the millennial generation has a very different approach to life, and to financial advice.

You already know this. It’s why you created a new advisory business model to serve millennial clients: One that is based solely on “financial advice,” with no asset management, no product sales, no office visits, very low overhead, very low monthly fees, and great technology.

You and other millennial advisors created this new business model because it delivers financial advice in the way millennial clients want to get it — and pay for it. And it’s working well for you and for other millennial advisors across the country — and their clients. 

Most baby boomer and Gen X advisory firm owners don’t understand any of this. However, a growing number of these firms are realizing that their firms aren’t attracting millennial clients, and they understand the implications of this on their future businesses.

This is why some of them want to either merge your business into theirs, or hire you. That’s the good news. The bad news is that many of them will have a hard time understanding and accepting your revolutionary business model.

Chances are they aren’t going to accept your business model. Or at the very least, will want to “modify” it.

We know that’s not going to work. If you are contemplating joining an older firm, or merging your business into one, you’ll need to make sure that they’ll let you work with millennial clients your way.

2. Make sure the firm believes in what you are doing.

A good litmus test is whether the firm has lost the fiction that millennial investors don’t want financial advice. You know millennial investors want advice because they pay you for it every month.

But it’s often easier for older advisors to rationalize they aren’t attracting millennials as clients because they don’t value financial advice — rather than understanding that millennials simply want financial advice in a different package.

Obviously, this is a red flag. With that mentality, their firm isn’t going anywhere with millennials, and neither will you if you join it. And don’t think you’ll be able to “bring them around” to your way of thinking. Chances are you won’t; and the consequences could be bad for both of you.

3. Are they making the transition from managing assets to delivering advice?

A key industry trend that the millennial advisory model is based on is the devaluation of asset management.

The good news is this trend is driving to new highs investor willingness to actually pay directly for financial advice. You already know this, but you should make sure that your prospective new employer knows it, too.

He or she may not be planning to drop asset management service any time soon: It’s still generating significant revenues in most firms. But an acceptance that AUM is not the only way to serve a client is a good sign that a firm owner will embrace a very different business model for the future — such as yours.

4. Will they create a new subsidiary for you?

In my experience, the millennial model has a different marketing momentum; a way of doing things and approaching opportunities and challenges. And this momentum makes the model and the people who work there require a different way of managing the business and its clients.

Your millennial advisory business model is so new, and so different, that it will be hard for people in an older firm — from the CEO to the receptionist — to get their heads around.

Consequently, I find that the most successful model for integrating a millennial advisor into an older, established advisory firm is to not to — at least not directly.

Instead, it’s best to set up a separate business for you to work with millennial clients, without oversite or interference from a parent firm. This will give you the best chance for succeeding in your new environment.

And, it’s also a good indication that your new “boss” really will leave you alone to take care of your millennial clients your way. 

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