Does Age Matter?

Bill Parrott |

Bloomberg recently published an article titled: The Old Rules for Building Wealth Are Obsolete. It highlights a few prominent financial advisors who target millennials. My take on the article is that older planners don’t understand younger clients. One advisor said, “Do you think someone’s going to tell some 65-year-old white dude, ‘Hey, we’re having trouble getting pregnant, can we take $20,000 out of savings?’’ She said, “They Won’t.”[1] Listening to the client, assessing their situation, and implementing their plan is universal – regardless of the age of the client or the advisor.

I was 24 when I started in the investment business. My friends and I didn’t have any money. We were concerned about paying down debt, getting married, raising kids, buying homes, and advancing our careers. We were struggling to save $50 a month, and we never talked about retirement. We had millennial-type issues.

Clients feel more comfortable working with advisors who think and act as they do, so it’s not surprising that younger clients want to work with younger advisors. My first branch manager told me clients gravitate towards advisors in whom they have much in common. My initial clients were in their 60s, 70s, and 80s primarily because I prospected with tax-free municipal bonds, a popular investment among people with assets. After obtaining a new client in his mid-80s, an “older” broker of 50+ approached me to see if I needed help. He was concerned I wouldn’t be able to handle the account because I didn’t understand the individual’s needs. I didn’t take him up on his offer.

If age is the key component for a client-advisor relationship, then boomers will work with boomers and millennials will work with millennials, and so on. Thankfully, this is not the case. Advisors most likely work with a slice of each cohort.

Unfortunately, the financial planning industry does have an age and diversity problem. It’s an industry dominated by older white males. 77% of Certified Financial Planners® are male[2] , and the average age is 50, while 11.7% of advisors are under the age of 35.[3] According to the Bureau of Labor Statistics, 86% of individuals working as a personal financial planner are white.[4]  

I welcome the youth movement for the profession, maybe because I started in the business at a young age. When I talk to students, young professionals, or youth groups, I encourage them to explore the industry as a career choice. Colleges and universities have been offering degrees in financial planning for a few years. Schools like Texas Tech and Texas A&M are producing extraordinary financial planner graduates – a boon for the profession.

Next year I’ll be the president of my local financial planning association, and my mission is to expand our Women’s Initiative program and NexGen platform. Our women’s initiative is strong and robust; NextGen needs some help. I’m hopeful these two groups will flourish in our chapter for years to come. Our chapter does have a growing presence among women, minorities, and millennials. Two of our past five presidents have been African American women.

Financial planning and investment advice have always focused on relationships and trust. A good advisor will listen to a person’s needs, assess their situation, and give guidance. More importantly, they put the interest of their clients first and act in a fiduciary capacity. These old rules will never be obsolete.

Financial planning is life planning, and life is constantly changing. The young will grow old. Their wealth will increase. Their needs will change. My friends and I are much older now, and we’re concerned about retirement, helping our children launch their careers, worried about our aging parents, and giving back to our communities. The circle of life marches on; I doubt it will change soon.

Maybe I’m an old curmudgeon, but I still believe the planning and wealth management rules of yore still work today. Financial planning should be agnostic to income, age, race, gender, etc. It should be available to those who want or need help - based on trust and understanding.

Don’t let anyone look down on you because you are young, but set an example for the believers in speech, in conduct, in love, in faith, and in purity. ~ 1 Timothy 4:12

Wisdom is with the aged and understanding in length of days. ~ Job 12:12

July 25, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have any asset or fee minimums and we work with anybody who needs financial help regardless of age, income or asset level.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor.