Advisors aged 60 and over say their age, experience and own financial situation give their clients a sense of comfort.
They say that having decades of experience in allocation of investments and knowing how to handle market downturns, as well as being close to the age of their clients and having a comparable financial position, gives them an edge over younger advisers.
Counselors who are 55 or older make up 43% of the industry’s workforce, and the average age of an FA is 51, according to 2020 data from Cerulli partners. On average, 52% of advisors’ clients are 60 or older, notes Cerulli.
Already advisers during past market crises
There is “no doubt” that the experience of navigating market downturns is something that customers are looking for, according to Blake pratz, 60 years old, founder and managing partner of a registered investment advisory firm Icon Wealth Partners.
“They’re looking for someone who’s been through market cycles, who’s made it through the different types of market downturns,” he said.
A younger advisor who had not been in the industry during the dot-com crash of 2001 or the financial crisis of 2008 would not be able to answer client questions about allowance recommendations in response to these. crises, says Pratz.
“Going through it and being able to relate exactly what you did during that time is huge,” said Pratz, referring to the benefit of the experience.
Clients of the Houston-based RIA also like to see that an advisor has “enough net worth to be aligned with investments,” according to Pratz.
“They can relate to someone who has saved enough, has invested, has the same investments as them and knows what are the ups and downs of certain types of investments,” he said.
Pratz has been in the industry since 1984, when he registered with Dean witter reynolds, according to his BrokerCheck profile. He was registered with seven firms during that 36-year period, including Citigroup Global Markets, Morgan stanley and UBS Financial Services, according to BrokerCheck.
He says Icon, where it has been registered since 2016, has $ 1.9 billion in customer assets.
Customers want gray hair
Ahmie Baum, 66 years old, founder and CEO of Interchange Capital Partners, says his customers, especially business owners, can relate to him.
The Pittsburgh-based RIA provides business owners with services like appraisals, liability and debt management, and exit planning, according to its website.
“Having me there at their age resonates with a younger counselor coming in and saying, ‘You really don’t know what I’m going through.’ There is definitely a feeling of comfort, ”Baum said.
While business owners are open to working with young advisers at Baum’s firm, he said they will often ask to work with him simultaneously because they “want that gray hair, that wisdom and that knowledge base. “.
Baum echoes the fact that young advisers do not have the experience to deal with market downturns.
“You can’t deny that these advisers in their 30s have never been in a bear market. They haven’t experienced much turmoil, ”he said. “There is something very valuable from a client’s perspective in terms of the convenience of having an advisor who has decades of experience.
Baum has been in the industry since 1980, when he registered with EF Hutton, according to his BrokerCheck profile, he was registered with five companies during that 41-year period, including Lehman Brothers and UBS Financial Services, according to BrokerCheck.
He says Interchange, where it has been registered since last year, has $ 400 million in client assets.
Disciplined enough to hold on
According to Sam liebman, 77 years old, founding partner and chairman of Amplius Wealth Advisors.
It is also about understanding the “behavioral” responses to crises, those of his clients as well as his own.
“It’s good to have that experience,” he said. “You don’t do contrary things just for fun, but you don’t follow everyone just for fun, either.”
Helping clients navigate market turmoil helps them develop “a discipline of risk control,” he added.
The RIA company based in Blue Bell, Pa., Also has younger advisers, and Liebman says clients of these FAs tend to turn to him for advice amid uncertain marketplace.
“When times are tough they know I’m there and they ask, ‘What is Sam saying?’,” He said.
Liebman has been in the industry since 1970, when he registered with Bache & Cie., according to his BrokerCheck profile. It has been registered with companies including Prudential securities, UBS Financial Services and Merrill Lynch over that 50-year period, according to BrokerCheck.
He says Amplius, which was approved for registration in February of this year, has just over $ 1 billion in client assets.
Do you have a topical tip that you would like to share with FA-IQ? Write to us at [email protected].