Unsure About Utilizing a Younger Advisor?

We always strive to be unbiased in our work as advisors—that way we can always do what is most prudent for our clients. In my 5 years as a younger advisor working alongside the entire age spectrum of advisors, I observed a lot about the dynamics affecting both younger and older advisors. While I may be a little biased as a younger advisor myself, I wanted to write a blog about the potential advantages of working with a younger advisor!

When people look for advisors they usually follow what they believe is the most sensible path: Find an advisor who is older, grey haired, wears three-piece suits every day to work, has years and years of experience, etc. Jokes aside the psychology makes sense—they’ve probably ingrained fundamental truths in their heads, seen the ups and downs of economic cycles, and have a ton of info stored in their brains to cover many situations.

When people look for experts in any field, I believe folks tend to look for experience and a track record. So why go with a younger financial advisor? Why is that any different? Here are some key differences you may find between younger and older advisors.

The Hunger Factor

As I see it, many younger financial advisors (especially independent ones) are still pretty aggressively building out their books of clients. How do you differentiate yourself as a younger advisor? With knowledge, availability, and attentiveness to your clients.

Touch Points

We believe an older advisor who is adding you to an already long list of clients may be able to help you out up front and be very reassuring, but the attentiveness may wane quickly unless you are coming in as one of their larger clients. An unfortunate reality of this business as I see it, is that the ones who are making advisors more money tend to be the ones who get the most attention and care from their advisor.

In fact, in my experience at a big brokerage firm a lot of folks tend to get one sit down with a well-established senior advisor, are enrolled in managed accounts, and aren’t even added to that advisor’s official book of business as a client! When I first began as a senior advisor at a big firm, I was given many of these “one and done” clients to build out my book, and to their dismay my phone call was how they found out that they weren’t ACTUALLY the more senior advisor’s client. Most hadn't spoken to the senior advisor in over a year. Not a pleasant experience for either of us.

With the exception of very high net worth clients (in my experience, at least $1-5 million with the firm) you may come in as a new client working with a senior advisor and get a terrific up-front experience without much care down the line. A younger advisor may be able to provide much more care, and even if you do fall in the high net worth range that is even more motivation for a younger advisor to take care of you as you are probably a relatively big client for them in comparison with your size in an established advisor's book.

Education & Keeping In Touch With Current Trends

As younger advisors we are usually aware that we are lacking in experience in comparison with our older peers. We are generally motivated to educate ourselves heavily and become as knowledgeable as possible so we can win and keep our clients’ trust. This is done through consistent self-education which enhances our interactions with clients and helps build our knowledge base. Younger advisors may also be more in touch with how the world is changing through technology and other trends. They may also have experienced mentors or resources that they utilize such as podcasts to absorb the wisdom that comes with experience.

An older advisor who has the benefit of experience may rely more heavily on said experience without keeping up with trends or brushing up on their knowledge as much.

The Bigger Picture

The career stage of your advisor may also have big implications for those who are still in the accumulation phase or are approaching/right at retirement. Why is that?

The answer is pretty simple. If you want to retire at 60-65, what do you think your advisor who is in their 50s wants to do? Most probably want to do the same thing. A younger advisor, on the other hand, should be around for quite a while! If you’re in your 50s and you’re retiring in the next decade, your younger advisor in their 30s will probably be working with you and your family for the rest of your life. This could be a huge benefit to you for a few reasons:

• You won’t have to switch advisors or potentially be on your own in the middle of your retirement. Retirement can be more vulnerable than your working life because at that point you are relying on your assets much more heavily to maintain your lifestyle. Having a trusted advisor to see through your retirement may be a comfort to you.

• Familiarity with your family. If something unexpected happens to you your family will have someone they trust to contact and help them through a very difficult time. This also applies to passing away of old age—having a trusted advisor to see through your retirement and help your executor when the time comes is extremely beneficial to your family and beneficiaries.

• If you’re a bit younger yourself this will be of a tremendous benefit as well. A younger advisor will likely be more familiar with what you’re going through as they will be living in the same environment and facing similar challenges as you!

• If you’re still building wealth, teaming up with a young advisor will start a decades-long relationship focused on helping you build your wealth.

As a younger advisor I have faced plenty of skepticism over the years. Obviously I believe that everyone should work with the advisor who is the right fit for them, and none of the above statements hold true for every advisor in their age group. There are also key differences in the structure of their firms that could change the way an advisor works with you regardless of their age. See our blog about finding the right advisor for you for more insight on that. The goal of this post is to encourage folks to give the opportunity for a young advisor to prove themselves! Behind every older advisor is a younger version of themselves who got a chance and created a successful career with their clients’ trust.