Financial Planners for Young Clients

Financial Planning

Financial Planners for Young Clients

Millennials prefer to pay by the month and stay in touch via text message.

Photo by: Dave Lauridsen

Bob Veres (pictured at left) is editor and publisher of Inside Information Service, a publication for financial planners. We spoke with him about how millennials approach getting professional assistance with their money matters. The following is an excerpt of our conversation.

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KIPLINGER: You say the financial-planning industry is reinventing itself when it comes to younger clients. What are you seeing?

VERES: The younger clientele is focused on lifestyle more than retirement. They want to take a sabbatical in five years, or a trip to Europe. So rather than retirement, the conversation has to be about good saving and investing habits, budgeting, and cash-flow planning. Younger advisers tell me their Gen X and Y clients don’t want to pay a big, up-front fee for a financial plan, or pay a percentage for someone to manage their assets—they don’t have a lot of assets. But they’ll pay a monthly bill to keep a planner on retainer, the same way they pay for cable ser­vice or a gym membership.

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How does that work?


The ballpark fee for a comprehensive financial plan is $3,500 to $5,000. Planners who bill on an hourly basis charge $125 to $350 an hour, which comes out to about the same as for a traditional plan. The retainer model is for people who can’t afford as much. It runs $100 per month or a little more.

What do you get for that?

Instead of focusing on a road map to the future, planners are assessing where clients are—helping them get out of debt, giving budgeting advice, keeping track of hotel points and frequent-flier miles, and helping them plan trips. It used to be that planners sold, managed or gave advice about investments. Now, an adviser helps you navigate the entire financial jungle, whatever that might be. There’s a lot of contact, but it’s not what somebody in his sixties would think of as a traditional professional relationship. Clients and advisers aren’t meeting as much, but they text back and forth. The client is free to leave the arrangement at any time, putting more pressure on the adviser to continue to add value.

Can you give an example?


One valuable service is putting all of the assets and finances on a dashboard, so clients can see everything in one place and track their progress, whether it’s making more money, saving more or getting out of debt.

What happens when these clients are older?

When this cohort accumulates sufficient assets, their finances will be more complicated and it will be appropriate to charge more. Planners may still charge a flat retainer fee, just bigger. The profession is evolving to reduce conflicts of interest—moving from selling financial products to charging for assets under management to charging a retainer fee. The retainer will be where it ends up.