Women in finance series: A conversation with millennial advisor Sophia BeraArticle added by Carley Meiners on March 3, 2016
Carley Meiners

Carley Meiners

Joined: June 01, 2015

Millennials are often ignored by financial advisors, which is a huge problem according to Sophia Bera, CFP and founder of Gen Y Planning. Bera is attempting to combat that problem. Not only does she offer financial planning to millennials but she also speaks up on Twitter to help others better understand how millennials work. Here, Bera offers a fresh, young take on the industry by discussing the problems millennials face, the lack of financial education and how millennials can actually help grow business.

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ProducersWEB: How do you think millennials differ financially to previous generations?

Sophia Bera (pictured right, photo from Bera's LinkedIn page): The first thing that comes to mind is that our financial situation is a lot different from previous generations. A big part of that is the student loans affecting a lot of this generation. I would also say it’s a much more entrepreneurial-minded generation than in the past. So we think about money a little bit differently because there’s less job security. We’re not necessarily going to be at one company our entire career, but we might have a career path that can really grow. I have a lot of clients who are entrepreneurs so they’re working for companies that are thinking very entrepreneurially about their careers. Those are two big things.

PW: What do you think about the studies that say millennials are not inclined to save money? Is there a lack of financial education?

Bera: I do think this country has a serious lack of financial education as well as sex education. Sometimes I feel like they go hand-in-hand. Those are the two things people don’t want to talk about: sex and money. I’m equally passionate about both being in schools at a young age. So I mean I do think that financial literacy in this country is shockingly sparse. I think that’s a huge issue and it’s one of the reasons why I tend to donate to financial education organizations.

I think a couple of things are often misconstrued, such as millennials have an extremely low risk tolerance and that they’re not investing in the way that they should. Those studies are really difficult to decipher because you don’t really know which questions they’re asking. They might be saying, “How much money do you have in savings?” The response: $10,000. And then they might ask, “How much money do you have in your 401(k)?” Response: $10,000 and it’s 100 percent stock and your savings is 100 percent in cash so advisors might say, “You have 50 percent of your portfolio in cash, this is horrible.” But that may be your emergency savings. I feel like the surveys that are done don’t represent what millennials are actually doing. I mean it might be OK to have $50,000 sitting in cash if you’re planning on quitting your job and taking a trip around the world in six months. What I have found is that a lot of millennials are willing to invest, they just want someone to talk them through how to build a proper asset allocation in their 401(k).

Another big thing that comes up, or I’ve seen in the press a lot lately, is this idea that millennials are moochers. I really see the opposite with my practice. Millennials are helping out their families or helping out their parents. My ex and I moved in with his parents for a year because his mom was retiring, and they were going to be on a fixed income so we paid half their mortgage. You know a lot of my clients are first generation immigrants and their families have invested a lot of money in them to get an education in the U.S. and give them hope for a better life. Now, it’s very much their responsibility to help their parents in retirement and help contribute to their well-being now that they’ve graduated from college and have a good job. There are a lot of cultural things that are going on that I think go under explored.
PW: How can advisors help with that financial education gap? How do you do that with your clients?

Bera: Educational content is what makes you attractive and what attracts millennials to advisors. That’s why so many follow financial bloggers because they’re putting out useful content online. That’s a big thing I want to start doing more. I want to start doing webinars and create a course. I just see financial education being a bigger part of my brand.

PW: A bunch of advisors talk jargon. That can be really intimidating because you may not know what to expect or what everything means. Do you think because you’re a millennial, you can relate better to your clients?

Bera: I was a theatre major in college and then an artist so that helps me understand how jargon can be confusing to clients. I want to have real conversations with real people, and I think it’s completely pointless to try to confuse clients as a way of winning their trust. That doesn’t make any sense to me. I feel like there’s a lot of financial advisors that have built their practices on just confusing people in order for them to say yes, which is what gives the profession a bad name. That’s why it’s still called an industry and not a profession.

You can tell I’m a little sassy and talking to me isn’t like talking to traditional financial advisors. But I think that’s why I have the clients that I do. I think that a good financial advisor is a really great communicator. You should feel really comfortable talking to your financial advisor and going through things with them and sharing your story with them. They are going to know intimate details of your financial life, and you have to feel comfortable with that.

PW: Recently, I read an article that suggested millennials should not be investing. The writer’s reasoning was because millennials are not worried about buying a house at this young of age like their parents were. To me, that’s bad advice.

Bera: Yeah, I totally agree. I read another article that quoted this financial advisor saying millennials don’t need a financial advisor, ‘it’s really not that hard. They just need to be focusing on paying down debt and building your savings.’ It was basically saying millennials are not worth our time as financial advisors. That was so annoying to me, and I sparked this Twitter outcry. I’ve built my whole business around this theory that they actually do need advice. It was just so outrageous to me because how dare you make millennials seem stupid and foolish for wanting to have someone to reach out to with their financial questions.
PW: Ok, let’s talk about your business. What’s the pros to having a business online?

Bera: For me, it allows me to work with a bunch of interesting, fun clients from across the country. It’s great because it doesn’t matter where I am or where they are. I recently moved from Minneapolis to Austin, Texas. I literally took off Wednesday and picked right back up on Thursday without missing a beat. It also allows me to have meetings that are convenient for my clients, like 7 p.m. on a Tuesday or 10 a.m. on a Saturday. I can have a really flexible schedule because I want to accommodate what works for them. It’s really inconvenient when I say, ‘Well actually, you have to take a half day off of work, drive a half-hour to my office, pay for parking, and then you’re going to sit down in a two-hour client meeting. And then in a month you’ll take another half day off of work to come into my office.’ That’s the traditional experience I wanted to get away from. Let’s just Skype when it’s convenient for you, and I’ll send you all forms electronically. I share a Dropbox folder where you upload everything I need you to and then we can hop on Skype calls where I can see you and you can see me. Then a month later we’ll go through an hour-and-a-half call talking about planning tools and an action check list for a full, comprehensive plan.

PW: Sounds like a breath of fresh air.

Bera: Yeah, I spend a lot of time discussing careers and what life insurance you should have and we go over your company’s benefits. All these things people want to know. It just makes me mad when people think that young people don’t need financial planning because think about the number of life changes people experience from mid-20s to their early-40s: Marriage, buying/selling homes, divorce, maybe, having babies, moving and new jobs. There’s a lot people are navigating through, and they need somebody on their team they can ask financial questions to.

PW: When I graduated from college, I remember talking to my dad about the process of becoming an adult and saying, “I don’t know anything about how to handle my own finances and benefits,” even just simple things like what is a 401(k) and how does it work. These are all things you should know when you graduate. I ended up going to a seminar about what you should expect when negotiating for a job and how to budget. The seminar was small relative to the amount of people graduating. I feel like it should have been required.

Bera: Oh yeah, I also think it’s interesting that you talked to your dad about your finances. This comes up a lot: I have a lot of young, millennial women say, ‘OK, I’m going to talk to my dad and then I’ll let you know.’ I never have any guys say that. I think it’s really fascinating we equip men with the decision-making skills that they need to decide if they’re ready to invest in a financial advisor.

I did the same thing when I wanted guidance in certain areas. We see them as this trusted person. You’re lucky your parents know what they’re talking about because you could be getting great or horrible advice from your parents. But I also have a lot of clients who say, ‘Yeah, my parents are in a lot of debt and I don’t want to experience the same thing.’
PW: Do you think technology is going to have a bigger role in the industry?

Bera: I hear this a lot at conferences where more traditional advisors will come up to me and say, ‘Hey we started doing Skype meetings at our firm.’ It’s always because of their baby boomer clients asking, ‘Hey we fly down to Arizona every winter, and we Skype with the grandkids while we’re down there, can’t we do the same with you?’ So sometimes it’s wrong for advisors to say, ‘Oh not my clients, my clients are in their 70s so they wouldn’t possibly want that.’ Technology is enabling their family to connect with them in ways they didn’t before so they ask themselves, ‘Well, why wouldn’t I connect with my financial advisor that way, too.’ I do think it’s going to become more important.

I’m one of the founding advisors of XY Planning, and a lot of us are working virtually with clients across the country. So I think you’re going to see a lot more of those hybrids and people are also going to be niching down a lot more. I think, eventually, we’ll have to choose a niche otherwise [the market] becomes too big. Let’s say you’re an orthodontist and you’re thinking about selling your company and retiring in the next five or 10 years. But you don’t know if it’ll be closer to five or 10 years. Wouldn’t you rather work with someone who has helped orthodontists across the country transition their businesses for the last decade than the local financial advisor in your neighborhood? So I think you’re going to have people who think, ‘Oh this is the guy who knows about selling orthodontist firms. They know how to hire staff, where to transfer shares and which tax accounts I need to work with.’

PW: Great point. Lastly, what do you think older generations can learn from millennials?

Bera: I think that technology comes naturally to millennials so let them run with that. One of the tips I often give students is to offer to set up a LinkedIn profile for your company’s firm and your boss. How do we help your boss have a presence online so that when people do look him or her up they look really great? I think getting active on social media is also important. Twitter is where the press is, so if you’re not on Twitter you’re going to miss opportunities. Millennials can easily create a Twitter profile for a company and also do a blog and interview people at the firm for posts. That’s how people get to know what your firm stands for and what you value. There’s just so many little marketing things that millennials can do easily that’ll help your firm.

Oftentimes, millennials are able to go into businesses that have been around for a long time and find some software or process that’s going to work better. ScheduleOne is something I use. You can choose from times that are in my schedule that work for you and then I automatically get notified about it. We don’t even have to go back and forth on email. There are still firms calling 100 people every quarter to get them in for their mid-year review meeting. It’s just extremely inefficient. So I think let millennials at your firm introduce tools and technology that can help you streamline things, which will save money and time.

To read our first interview in this series, click here.
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