As a financial advisor looking to grow your business, it’s logical to target niches where some degree of wealth already exists. Few advisors consider focusing on clients who have great potential to build wealth but aren’t there yet. Let’s refer to this group as “young money” clients. If you choose this niche, you’ll likely find that the field is wide open. It’s a great chance to build a portfolio of loyal long term clients.
Who are they
“Young money” clients are recent college or professional school graduates entering the workforce with a starting salary of $100,000 or more. They may have equity and bonuses as well. Some members of this niche are financially savvy while others have no idea of how to manage their new income. You may find that both are good target clients, or you may choose to focus on those who need more guidance. If you go with the latter option, keep in mind that they may need more hand holding in the beginning.
Why target them
According to Glassdoor, the average first year law associate makes $107,549/year. That number increases to $190,000 for those starting at large firms. The average new graduate software engineer makes over $100,000/year. The numbers given for both fields exclude signing bonuses and equity. To the young money client, this can seem like a lot of money until the bills show up. Then they’re stuck trying to balance paying living expenses and debt while trying to make other financial decisions. If you convert these clients before this stage of the process, you can save them a lot of grief and a lot of money. You’ll also build trust and establish your reputation as an expert.
Working with young inexperienced clients is not for everyone. Financial advisors who are up for the challenge can build a solid client list. Young money clients are a generation of sharers. If you perform well for them, they’re likely to recommend you to friends which is always good for business.
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