Sponsored by Commonwealth Financial Network.
By Maria Considine King
The generation gap is omnipresent in many firms where baby-boomer owners work closely with millennial advisors who want a clear career path—and a chance at ownership someday. These two generations have many reasons to be in sync, but they feel disconnected instead. Consider the positives of their relationship:
- Baby-boomer advisors have a lot of wisdom to share with their younger colleagues, particularly about what it takes to run a successful business.
- Owner-advisors increasingly want to stay involved with their firms, albeit at a reduced level. This willingness creates an opportunity for younger advisors to take on more responsibility without being completely on their own. Further, it gives baby-boomer advisors an opportunity to mentor and share wisdom.
- Successful financial advisory practices have the need and ability to create career paths for younger staff members. Opportunities to specialize—as advisors and support staff—are wonderful ways to learn about the business and stay in it for the long run.
- Clients like when advisors plan for the future. Younger generations in the office convey stability and longevity.
But if all this is true, why do baby-boomer owners and millennial successors so often struggle to make their match work?
Baby Boomers: A Persistent Urge to Hold On
Owner-advisors are sometimes loathe to let go of the business they have created. Who can blame them? It is immensely fulfilling and satisfying to know that you have created a business from scratch that is critical to your clients’ ability to live the lives they envision. Add to that the fact that you employ people, giving them a way to contribute and rewarding them for work well done, and it can be very hard to let go.
This point is well illustrated with the Greiner Curve, a model showing the dynamic growth cycle of businesses. It suggests that the things that lead to a firm’s success (e.g., creativity, direction, alliances) can also plant the seeds for crisis. Your ability to envision a firm, gather the resources to form it, and define and grow it over decades is an amazing talent. At some point, though, the focus on you will be its doom. For a business to survive, the owner must be willing to let go so others can carry the firm forward.
What, specifically, do you need to allow others to do? Allow them to create, to make decisions, to take responsibility, to take control, to forge alliances, to take risks, to fail, and to succeed. Allow them to become a business owner.
Millennials: A Lack of Understanding About the Emotional Side
For millennial successors, they see the passing of the baton as their entrée into leadership, and they are often impatient to demonstrate that they have what it takes to own a business and manage an advisory practice. They see the possibilities, from operational decisions to marketing strategies, that they can capitalize on when they are in the driver’s seat. But this eagerness may lead them to lose sight of how the firm got to where it is today—the time, energy, emotion, and money the founder put into the business to achieve that success. As a result, founding advisors may be left with the impression that their millennial successors don’t appreciate all the layers of emotion that are in play during this potential transition.
So, what can millennial advisors do to make this process easier? They can differentiate themselves by making a point of talking with the founder about the issues that take on new meaning at this stage:
- What the advisor is experiencing
- What the advisor wants for the firm and for him- or herself in the next stage of life
- What clients may be feeling and thinking about this transition in ownership
By having heartfelt conversations and by demonstrating, through their track record, that they are the right person for the job, millennials can significantly minimize or even eliminate any concerns the founding advisor may have.
Overcoming the Disconnects
Millennial advisors should focus on the owner-advisors’ needs, concerns, and interests. What do they want to accomplish by transitioning some or all of the business to a successor? And what will they do when the transition takes place?
As for you baby-boomer advisors, you must recognize when you’re getting in your own way. Millennials are not like you, it’s true. But what would you be like if you were starting over and entering the industry today? How would you approach your career? The answers may not be too dissimilar from millennials’ goals and dreams.
Although it can feel like baby boomers and millennials speak different languages, it may be that they are speaking the same language but in different time zones—the past versus the present versus the future. Talk with one another and you may find more common ground than you can imagine.
This post originally appeared on Commonwealth Independent Advisor, a blog authored by subject-matter experts at Commonwealth Financial Network®, the nation’s largest privately held independent broker/dealer–RIA. To subscribe, please visit http://blog.commonwealth.com/.
Maria Considine King is vice president, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, an independent broker/dealer–RIA.
