Charles Schwab’s most recent generational study shows investors between the ages of 30 and 45 control nearly $3.5 trillion in investable assets. What’s more, over the next three decades, $16 trillion in investable assets is projected to transfer to the next generation.
Numbers like this tend to pique financial advisors’ interest. An extraordinary amount of money is set to change hands in the coming decades, which makes it imperative that advisors are able to maintain client loyalty beyond the original investor. This is done by building multi-generational relationships, which is most often accomplished by building multi-generational teams. Understanding generational differences internally is the best way to ensure external success for decades to come.
There are four generations actively working together at Moneta Group: traditionalists, born prior to 1945; baby boomers, born between 1946 and 1964; Generation X, born between 1965 and 1980; and millennials, born between 1980 and 2000.
For these reasons, Moneta Group is highly sensitive to the unique subject of generational differences and has been purposeful in its approach to developing multi-generational teams that serve multi-generational clients.
“We encourage professional and personal growth at all levels and continue to invest heavily in our training and development programs to leverage the intellectual capital of our firm,” says Tom O’Meara, chairman of the board at Moneta Group.
Moneta Group teams purposefully consist of members of various generations, which often increases the chances that truly genuine relationships can be developed between clients and their advisor team. Think about it this way: clients’ children and grand children will likely have trouble connecting to the baby boomer advisor 20 years their senior but would be much more likely to connect with another Generation Xer or millennial.
This is especially important in the financial planning industry.
Research has shown 90 percent of children change financial advisors after the death of their parents. However, understanding the nuances of each generation and matching advisors with clients of similar generations allows Moneta to exceed the expectations of its clients and contributes to a 95 percent retention rate.
“Our business model takes a long-term approach when it comes to serving our clients,” says Gene Diederich, CEO of Moneta Group, “which makes it important for us to nurture long-term relationships with our employees as well.”
And, with rapid growth and less than 10 percent turnover (relative to an industry average of 18 percent), this method appears to be working.
“Working together with all four generations has caused us to examine our communication, work environment, recruiting, training, development, engagement, community involvement—in short, everything we do,” Diederich says. “We are better because of it, and that makes our client experience better. It has become an absolutely invaluable practice.”