The millennial challenge for wealth management firms is twofold: they need to be thinking about their future clients and their future employees. That was one of the key messages of a talk at this year’s FOX Wealth Advisor Forum.

The millennial challenge for wealth management firms is twofold: they need to be thinking about their future clients and their future employees. That was one of the key messages to come out of branding expert Dan Schawbel’s talk at this year’s FOX Wealth Advisor Forum.

“If you don’t prepare for the next generation you’re going to really miss out on the talent pool…not only the talent pool but the next generation of investors as well,” Schawbel, managing partner at Millennial Branding, told conference delegates.

If that’s the case, Schawbel argued, it’s because employees and clients are both bound up by a firm’s overriding culture, which he equated directly with brand.

“If you have a really good culture and everyone’s on board in the company you’re going to attract the right people and repel the wrong people, which is good for your business, and it’s also going to help attract the right families,” said Schawbel.

At the heart of Schawbel’s presentation, delivered at the Biltmore in Coral Gables, FL, were basic statistics: Gen Y is going to make up about 36 per cent of the workplace by next year; in terms of the global workplace, it will make up 75 per cent by 2025, he said.

What’s more, this is an 80 million-strong generation with an “amazing work ethic,” he said.

“So these are going to be the decision-makers of the future,” he said. “If you build relationships with them now it’s going to pay dividends in the future.”

Those relationships, Schawbel said, had to be viewed in a more holistic light than how to sell to Gen Y. It was about “how to hire, how to attract, how to engage with them, and then how to sell to them and build those kinds of relationships.” And this begins with understanding them.

Work-life integration

Where previous generations may have fretted about their work-life balance, Gen Ys are thinking more in terms of a work-life integration.

“They don’t really see the difference between work and play, it’s all integrated,” said Schawbel.

“They have an amazing work ethic; these are people who it’s not just about 9 to 5, they’re just constantly working, always connected,” he said. “I believe that in the future we’re not even going to see a 9 to 5 work day …people are not even going to know when they’re working, it’s just going to be part of their lives.”

He highlighted an important implication of this: “If you hire millennial advisors, you can’t block social network access, you just can’t, because they won’t work for you,” he said, citing a Cisco study.

“Because, again, once they go to your office, they still want to be connected to their personal life. As a trade off - and this is a big trade off - once they go home, they should be connected to business life, and that’s the big trade off,” he said.

Attracting young talent

Another key selling point to young talent is transparency, said Schawbel. The culture of openness created by the internet means they are used to acting on recommendations from friends and being able to compare different offerings. Meanwhile, having experienced the fallout from the financial crisis in young adulthood, they have a low tolerance for feeling lied to or cheated.

“It [transparency] is actually a great way to separate you and your firm and everyone else…it’s a huge differentiator,” said Schawbel.

As well as transparency, fulfillment is a key issue for younger workers, said Schawbel, and millennials will often juggle their day jobs with freelancing, volunteering, or an entrepreneurial venture on the side. They build “multiple careers” with the goal of feeling fulfilled, he explained.

Just as they invest in themselves, they expect to be invested in. And if they don’t see this kind of commitment, they leave. Their average tenure in a job is shorter anyway than older workers’, at just two years, compared to five years for Gen X and seven for Baby Boomers.

“The number one reason millennials leave is a lack of career opportunities,” said Schawbel.

“A lot of firms are doing whatever it takes to hire Gen Y and keep them engaged,” he said. “And this is really important because if you don’t invest in them they will leave, if you don’t give them training or mentoring. That’s what’s going to really keep them engaged and wanting to work with you longer and put more energy into that job."

Meanwhile, if you create internal opportunities for employees you can also use your current employees to bring in their networks. Schawbel cited the example of using employees’ LinkedIn profiles to raise awareness about opportunities. Essentially, millennials employees' social networks can help build a firm’s brand.

For wealthy millennial clients, meanwhile, many of these lessons - about their goals and interests - are relevant. While they might not “need” a career financially, for example, they are still going to want to find their place in the world - through work, philanthropy and entrepreneurialism. Advice in these areas, as well as financial advice that will help them feel in control, manage their spending and develop their own financial plans, will empower them to support their lifestyles.