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  • Writer's pictureRianka

Who Are the Next Generation of Planners and Clients?

We are planners who have witnessed firsthand what a lack of financial knowledge can do to our families and friends. We are armed with the motivation to help our profession, and we are looking for firms to embrace us.

I was in the fourth grade when I went to live with my nana. My brother and I caught the school bus at the corner of the neighborhood block. Every morning, we would walk past our neighbors, Mr. and Mrs. Smith, who were around the same age as my nana, sitting on their porch in their rocking chairs, gleefully sipping coffee. I did not understand why the Smiths were able to see us off to school every morning, waving as we walked by, and my nana could not. It was not until many years later when I took a personal finance class at Virginia Tech that it clicked—retirement planning. Conversations in my adult years led to the understanding that my nana, like many of our grandparents or parents, did not have the financial knowledge or someone to speak to about their finances. This ultimately led to a lack of financial preparation for retirement. My nana worked until she was forced to retire due to illness, and the “golden years” was not a chapter in her book.

Among millennial financial planners, many of us have similar stories. Whether it’s a family member’s lack of financial knowledge to make sound financial decisions that are affecting their lives today, divorced parents (which can result in a major emotional and financial hit), or just the taboo notion of talking about money within our families.

With almost every conversation, there is a similarity among millennial planners. We have our personal journey of why we deliberately entered into this profession, we have our “why.” We have this breadth of personal finance knowledge that we feel should be shared with all generations, not just those with a large nest egg. We do what we do because we have this innate push to empower, educate, and inform.  

Impact and innovation are common themes that emerge in conversations with my peers. Millennial planners entering this profession have graduated from one of the more than 350 CFP Board registered programs, and are fueled with passion. We are planners who have witnessed firsthand what a lack of financial knowledge can do to our families and friends. We are armed with the motivation to help our profession, and we are looking for firms to embrace us.

Let’s peel a layer off the top and take a deeper look at the next generation of financial planners and clients.  

Embracing Technology

It is no surprise that technology is a part of the millennial DNA. We grew up with the Internet, experienced the evolution of cell phones and MP3 players like iPods, and are constantly thinking of ways to make our lives more efficient by leveraging technology.

We are helping firms become more engaged in various social media channels such as Facebook, LinkedIn, and Twitter to stay connected with clients. We’re continually seeking out creative ways to keep clients engaged through exploring proprietary phone apps that can push clients info when requested.

It is becoming imperative that we have a cross section of digital touch as we combat the digitization of advice. Robo-advisers are the new shiny object on the market, but they are no threat to our profession because the human conversation about life events cannot be duplicated by a computer. However, it is up to us to communicate to clients and prospective clients the value we bring to the table in addition to asset management. This is a great challenge that will stretch our current comfort zones with technology and we should take that challenge head-on.

We can become more creative in supporting the needs of our clients and presenting deliverables. The millennial advisers are great resources to tap into and help guide this ship.

Charting Career Paths

Millennial planners committing to being practitioners are choosing one of two roads—traditional or nontraditional.  

The traditional NexGen planners are establishing solid footing in their firms. Some are the very first hires and are helping the firm owner establish a career path through trial and error. We are witnesses of the evolution of NexGen planners starting out as a support advisers to now buying into firms. Some may take the client-facing role, and others are very comfortable with behind-the-scenes roles. The beauty surrounding the NexGen planner’s career path is that the path may vary depending on the type of firm and clients served.

As firms continue to refine career paths for NexGen planners, I think it is important to revisit job titles. Entering into the profession, most young planners are automatically labeled paraplanners. But when you ask clients what they think a paraplanner is, they automatically think of a paralegal. Perhaps the more appropriate title is associate planner. NexGen planners are entering into this profession with the educational standard to automatically sit for the CFP exam, whereas paralegals typically do not attend law school or sit for the bar exam. This presents something to think about as we evolve as a profession.    

Young planners on the nontradional road are taking leaps of faith and launching their own firms. These planners are finding value in embracing their millennial peers as clients, wanting to help fellow millennials make sound financial decisions. Another factor in this leap is the value they place on work/life balance. The demand for serving millennial clients was so high, that Michael Kitces and Alan Moore co-founded XY Planning Network to support planners whose direct target market is Gen X and Gen Y. With the launch of this platform in 2014, they have grown to more than 100 firms and are on a pace to continue growing, and rapidly.

I encourage firms to have the conversation around NexGen planners serving their peers and how this goal can be supported. Is it time for RIAs to start thinking outside of the AUM box? Millennial planners can grow with millennial clients together, much like baby boomer planners grew with their baby boomer clients. The baby boomer multimillion dollar client did not start off with that value. Rather they began with a modest income and small nest egg. The same can be true for today’s young professionals.

The Next Generation of Clients

Millennials, currently represented as ages 18 to 35, are more than 75 million strong and now represent the largest living cohort in history. Over the next 20 to 30 years, a massive $30 trillion dollars will transfer from the hands of baby boomers, to generation X, to millennials. There is a misperception that millennials do not have assets or an income to support the need of a financial planner. Check out these statistics from Nielsen, BankRate, and T Rowe Price:

  • Millennials make up 14.7 percent of those with assets over $2 million

  • 2.5 million millennial households bring in more than $100,000 income

  • On average, millennials are saving 8 percent to retirement plans

  • Six out of 10 expect to be financially better off than their parents

One in five have saved enough in non-retirement accounts to last three to five months

Are we missing an opportunity to engage the millennials at an impressionable stage in their lives? With the inevitable wealth transfer, now is a great time to train the heirs to be good stewards of their impending wealth. According to the Institute for Preparing Heirs, 90 percent of inherited money is gone by the third generation. Now is a great time to help millennials understand the true meaning of wealth.

Will this be a missed opportunity if we continue to go down the path of not engaging children of clients now? A recent study by InvestmentNews states that 66 percent of children who inherit money from their parents tend to move the assets elsewhere and leave their parent’s financial planner. So, what can we do as planners to halt the foreshadowed massive exodus of assets of heirs from our firms?

Build Trust

There is no doubt that it takes time to build trust with clients. After clients sign on the dotted line, there is still a sense of skepticism that’s occurring and they are sniffing you out. It may not be until life events happen such as a death or weathering the storm of the stock market until you go from being an adviser to a trusted adviser. The same is true for millennials. It is so important to engage in conversation with millennials now as they are accumulating wealth and may inherit a large nest egg from mom and dad. Encourage clients to include their children in annual meetings, when appropriate, to show that you not only care about their parent’s nest egg, but you care what happens when it is passed on to them.

Although there may be some truth to millennials moving from job to job, they have a strong sense of brand loyalty. You want your firm to be their brand. Build trust with millennials and gain the biggest fan. Millennials, in fact, love to refer.  

No Sugar, Just Facts

Millennials are DIY-ers, and without a doubt, they can start down the path of investing on their own and in fact, most do. According to the Ivy Funds report “Understanding and Building Relationships with Millennials,” 71 percent of college-educated millennials are investing, but only 22 percent invest through an adviser. This is a huge opportunity for NexGen planners to advise their peers.

Sure, millennials can Google “What is the rule of thumb for saving to a retirement account,” or “What is the best app to start budgeting,” but planners can tie it back to how these facts or apps relate to their specific situation. Yes, the budget app can tell them that they are over-spending by $300 a month. But what does that mean for them in the long term? How will today’s habits affect tomorrow’s financial security and how you will help them? Bottom line: just give them the facts—they will love it.


One of culture’s many definitions is “the behaviors and beliefs characteristic of a particular social, ethnic, or age group.” Let it be known that the millennial generation is more ethnically and racially diverse than its predecessor generations, and “connection” rates high on the list of importance. With there being more advisers over the age of 70 than there are under the age of 30 (according to CFP Board’s most recent demographics information), this is a great opportunity for firms to seek out new talent. It is important for a firm’s staff to reflect the melting pot generation. To engage the millennial generation, planners will have to be able to relate on their level, as this is another opportunity to establish trust.

As wealth starts to trickle down from the hands of the baby boomers and into the hands of the next generation, will your firm be equipped to retain the assets you have helped steward over the past few decades? Are we ready to fully embrace the next generation of technology, and challenge our current way of doing things? We are definitely entering into exciting times within the financial planning profession and I hope you are ready for the ride. 

- Originally published in the Journal of Financial Planning.



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