By: Taylor Bauer
Figuring out how to help mid-career executives is fairly easy compared with figuring out what millennials want from financial services. Mid-career executives hire an advisor to handle the complexities of their financial life. They've got sizable assets to manage, steep tuition bills for their kids and retirement and estate planning needs. Millennials, by contrast, may have a limited understanding of what advisors do. They're just starting out in their career, so they have less cash on hand. Moreover, some young professionals harbor suspicions about the financial industry. Growing up amid the Great Recession left them skeptical of Wall Street institutions and investment products. Yet advisors cannot ignore this huge segment of the marketplace. In the coming decades, millennials will inherit substantial assets from their baby boomer parents while entering their prime earning years. For advisors to win over the next generation, citing their credentials and knowledge isn't enough. They also need to explain their fee structure. A lot of millennials have a negative perception of financial advisors. To overcome this negative attitude, wealth management firms initially need to focus on the pricing transparency.
When millennials weigh whether to hire an advisor, they want assurance that they're hiring an educator acting in their best interest. They don't want a salesperson pitching products. They may already understand the role of a fiduciary, but many advisors still define the term. Stating at the outset that the only compensation they receive comes from the client — not from products they sell — can address concerns about hidden fees and commissions. Because many young adults have wide-ranging financial needs, they also tend to seek advisors who adopt flexible pricing options. Advisors who offer pricing to fit an individual's situation can attract more early-career clients.
Young professionals also may not necessarily understand how advisors get paid. That can lead to faulty assumptions about the nature of the relationship. When millennials who already have an advisor decide to shop around and switch wealth management firms, they may balk at the notion of paying a monthly retainer. Even though many advisors are embracing this model, it's still sometimes perceived as a less traditional way to charge for financial planning.
In the end, it comes down to explaining what financial services can do for young professionals who may have less than a decade of experience in the lower middle market. The process of educating millennial entrepreneurs doesn’t have to come in a pandering manner either. SA Capital Partners looks for every and all small business owners and startup runners as potential innovators of the future. The team at SA Capital Partners has a lot of experience in this field, which means they understand what periods of an individual's professional career yield certain concerns and foci. With experience in many sectors of the lower middle market, SA Capital Partners is looking to bridge the gap between your dreams and your tangible assets, which means that the first meeting isn’t just about financial services, it’s about building a long-lasting relationship.
About SA Capital Partners: SA Capital Partners is an innovative financial services firm that specializes in mergers & acquisitions advisory and capital raising for lower middle market businesses. We aspire to give all the tools necessary to complete any transaction. SA Capital Partner’s financial services industry specialists provide comprehensive, integrated solutions to banking transactions. Our breadth of services and industry knowledge allow us to understand each client’s unique business needs. Our goal is to make all financial services available to every small business.