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Training Millennials for Financial Fitness

13 Jun 2018
Training Millennials for Financial Fitness

With little income and a lot of debt, young professionals entering the workforce don’t appear to be ideal prospects for many financial advisors.

But 30-year-old Nick Vail has a different view of his generational peers and has built a successful practice that caters specifically to a demographic that outnumbers baby boomers.

“Most see a client with $5,000 to invest and think they’re not worth their time,” Vail said. “But that’s the target market I work with.”

Advisors who turn away young prospects because they have little to invest are missing out on an opportunity to keep them as clients when they start earning and saving more, Vail said.

“That’s like a trainer who says, ‘I’m not going to work with you. Come back when you’re in good shape.’ It doesn’t make sense,” he said.

To make it profitable to serve clients with limited investable income, Vail segments clients into three tiers, gold, silver and bronze, based on their assets and revenue potential.

Rather than charge a percentage of a bronzelevel client’s assets, he charges a $600 upfront planning fee, a monthly subscription of $100 for an individual and $125 for a family and a .75 percent asset management fee. Silver-level clients pay an upfront planning fee that ranges from $600 to $1,500 and a 1 percent asset management fee. At the gold level, clients pay the same upfront financial planning fee as silver-level clients and are charged a percentage of their assets under management.

Silver and gold clients may also receive additional services, such as meeting with a certified public accountant, in-depth Social Security analysis, retirement planning or assisting small business owners with their unique retirement needs.

The monthly subscription on bronze accounts is a unique way to serve young clients while creating a win-win scenario for both Vail and these clients. For this segment, Vail said he provides services more fitting to their life experience such as budgeting, financial literacy, student loan advice, clarifying asset allocation, protection planning for young families and education on the importance of estate planning.

“It’s similar to paying a monthly fee to get in shape at a gym,” Vail said. “We’re charging you $100 a month to get you in shape financially.”

Today, Vail operates a growing financial advisory practice, but he admits he didn’t have a clear career choice in mind when he enrolled at Purdue University in 2007. His future came into focus during a career session that focused on financial services, which convinced him to pursue a degree in financial counseling and planning.

After graduating in 2011, Vail broke into the financial industry with a large wirehouse, where he was soon frustrated by the firm’s emphasis on selling products rather than serving clients.

“They made it sound easy,” Vail said. “I could use any solution, as long as it was one of their 40 mutual funds. They had no meetings in the office and had me driving all over Indiana. I’d get a $2,000 account and have to drive two hours just to talk to them.”

Seeking a change, he reached out to his father, Billy, a long-time financial advisor, and the two formed Integrity Wealth Advisors in 2014. Today, they are partners but maintain separate offices in Granger and Carmel, Indiana, and serve clients from different demographics. Eventually Vail hopes to take over his father’s business.

As an independent advisor, Vail said he’s able to focus on his true passion – building relationships with his clients.

“It’s gratifying to meet with people,” he said. “When I meet with my long-time clients, the first half-hour we’ll talk business. The other half-hour we’ll spend talking about life. I’m engaged, so we might talk about that, or we’ll talk about what their kids are doing in school.”

Vail believes displaying empathy is the key to building strong and lasting relationships. That practice has helped him overcome any doubts clients might have about working with an advisor who is decades younger than them.

“I have to sit across from clients of all ages who are telling me their life is a mess. I have to be a calming influence,” Vail said.

Developing the ability to build those strong bonds along with the patience and business skills to grow a practice could be why so many millennials are struggling to find permanent careers as financial advisors, Vail said.

“It’s tough early on,” he said. “There’s no instant gratification. It’s tough to build a business the way you want it from scratch. You have to pinch pennies with little appreciation.”

To get through those challenging early years, it’s vital for young advisors to have a mentor who can provide advice. With that added guidance and the fortitude to get a practice up and running, the personal and financial rewards of being an advisor can be substantial, Vail said.

“I think today people are less willing to live lean,” he said. “They see their friends who are engineers making money early on and want to be like that. But if you can build up a practice, you can make a good living.”

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