6 reasons why younger advisors are outperforming their boomer counterparts — and how you can follow suitBlog added by Vanessa De La Rosa on April 9, 2013
Vanessa De La Rosa

Vanessa De La Rosa

Denver, CO

Joined: September 24, 2012

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Fidelity researchers were surprised to learn the results of one of their studies conducted last year: Generation X and Generation Y financial advisors are outperforming their baby boomer counterparts. The study, which surveyed 1,200 financial planners from RIAs to wirehouses, found that these young financial services professionals (age 47 and younger) held, on average, $8 million more in assets under management in their practices than advisors over the age of 47.

Alexandra Taussig, senior vice president of Fidelity's National Financial division, said she did not expect this outcome, "given how many fewer years [the younger advisors] have spent in the industry." What does she think is the reason behind their success? “When we really looked at why that was, we found it was all about technology.”

How are these younger advisors using technology to gain speed on their older competitors? The good news is that it has nothing to with age. The Gen X- and Y-ers surveyed showed strong habits in these six specific areas.
1. Automation technology

The study found that younger advisors relied more on technology that automates tasks, like portfolio rebalancing. With the extra time saved, they are able to invest more energy into building their businesses.


2. Online meetings

Gen X and Gen Y advisors are using technology like Skype to meet and interact with their clients, which also frees up more time to invest back into client relationships. A Financial Planning article highlights the client-engagement focus of Generation X planner, Ross Gerber.

“Our entire business is online,” Gerber explains, “so wherever we are in the world, we can manage client accounts. We can converse with clients. We also have the ability using Twitter and other means to communicate with them in an efficient manner.”

Another young planner, 32-year-old Jason Wenk of California, says he works with all of his clients exclusively online.


3. Social media marketing

The younger advisors surveyed had a solid presence on social networking sites like Twitter, Facebook, LinkedIn, and also featured blogs and articles in various places online to project their brand to clients and prospects. Planner Jason Wenk says he's built a following through blogging about annuity products online and claims he brings in $2 million of new AUM every month.


4. Collaborative planning

Fidelity researchers found other factors besides technology that contributed to younger advisors' better performance. Younger advisors were more keen to work collaboratively with advisor peers to build their practices, and the research shows advisors working in teams earn one-third more revenue than those who work alone. Advisors working in teams also tended to be more fee-based. Taussig points out: “The teamed advisor and the fee-based advisor typically make much more income as well.”


5. "Validator" clients

The study showed that younger advisors were working with more "validator" clients — clients who are looking for reassurance from their advisors that they're making the best decisions. This is opposed to the "delegator" clients — clients who prefer less oversight of their investments and who, Taussig explains, tend to gravitate to older advisors. It seems that offering more collaborative and holistic planning can attract more of these "validator" clients.

Taussig explains that Gen X and Y advisors "are making sure their clients hit their goals. They are obviously looking for performance, but through a slightly different lens, if you will."


6. More time with lower-net-worth clients

Fidelity researchers found that clients were giving three times more referrals and 57 percent more assets to young planners than baby boomer advisors. How? By investing more time in their lower-net-worth clients with fewer assets. But, as Financial Planning explains, "Those lower-net-worth clients are expected to make numerous referrals of other clients to the firm."
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