Joseph L., a 60-year-old veteran rep in New York says, for years, he had planned to retire at 63, soon after his youngest child finished college. Alas, the market pummel took a beating beginning in 2007 and his 401(k) plan took one along with it. Joseph has awakened to the fact that he could still be working at the ripe age 70.
Joseph is, of course, not alone. The ailing economy is forcing many Baby Boomers (the 77 million Americans born between 1946 and 1964) to delay retirement. And, a number of “Silent Generation” members—those born before 1945—are still in the workforce. In short, managers today may find themselves overseeing as many as four generations of advisors at once. And, it’s no easy task.
A 2010 survey by Lee Hecht Harrison, a Woodcliff, N.J., career management firm, found that over 60 percent of employers surveyed said they were experiencing substantial tension between employees of different age groups. When the Center for Work-Life Policy in Manhattan surveyed more than 1,170 Generation X workers—the approximately 51 million Americans born between 1965 and 1978—more than half said they felt “held back” in the workplace by Baby Boomers not retiring on schedule.
To create a cohesive mutli-generational team, industry experts say BOMs need well-defined plans to manage and recruit FA’s which include both a clear understanding of the different generations they oversee as a group—where “they’re coming from” and what motivates them—in addition to understanding the same for each on an individual level.
In the securities industry, clinical psychologist Alden Cass, author of The Bullish Thinking Guide for Managers, and head of Competitive Streak Consulting, which specializes in the industry, says the greatest strife he finding is between Baby Boomer FAs—who are unhappy about having to work longer than they’d planned—and Generation Y-types (the roughly 80 million people born between 1980 and 2000) who feel they have been locked out of more senior positions as a result.
The majority of FAs—and branch managers—are part of the Baby Boom generation, according to Cerulli Associates, which puts the average advisor at just shy of 49-years-old; some estimates put the average age much higher, at around 54. “This group grew up with a very strong work ethic” says Chip Roame, who heads Tiburon Strategic Advisors, an industry research and consulting firm. “They saw success as something which was achieved through hard work and loyalty.”
But, in the next few years, the number of older workers will increase by 11.9 million, making up nearly 1 in 4 workers by 2016—the result of more seniors holding onto jobs due partly to shriveled home values and decreased stock portfolios, according to the Population Reference Bureau. And, FAs are no exception.
Managing experienced FAs can be tricky, says Paul Werlin, president of Human Capital Resources, a financial services industry consulting, training and executive search firm. “They believe they already have the all knowledge and experience they need. So, it’s very important that managers respect and actively listen to what they have to say.”
Still, Cass suggests managers communicate with them openly to help them avoid any issues of apathy. “Let them know you understand they’re disappointed that their timeline for retirement has shifted. But, stress that, since they’re very intelligent, competent people, you still want and need them to achieve. It’s crucial for their success, and for that of your entire team.”
Generation Xers (born between 1965 and 1979) have already established themselves both as managers and FAs in the industry, Werlin says. “In general, they’re more skeptical of the corporate world and may subsequently show authority figures less respect,” he says. “After all, many grew up in homes where their parents worked long hours only to see their jobs eliminated.”
The increased occurrence of divorced parents and working moms made this the “latchkey” generation. This cohort values independence and a balance work between work and home life, he says. “BOMs may do best giving them the tools they need and then ‘getting out of their way.’ They know they are responsible for their own actions; they don’t want or expect the organization to make them succeed. And they generally prefer to work out their own business plans, set out their own goals, and live with the results.”
To motivate them, don’t just focus on commissions, Werlin says. “Emphasize how growing their businesses can enable let them make a difference in their clients’ lives.”
Gen Xers are the people “who want stock options and believe they ‘own’ their client relationships,” he adds. “So, the more you help them invest themselves in their business, the more satisfied they tend to be.”
Millennials are people who are just out of college and now becoming FAs—or those moving up from sales assistant and junior rep programs.
This “child-centric” cohort grew up being told they can do “whatever they want,” says Cass, the psychologist. “However, the economy has created a different reality. A lot of these folks who teamed up with older FAs expected to be senior partners by now. Yet, their older colleagues may be working five to eight years longer than they’d planned. Millenials have to realize certain things are simply out of their control.” Having a successful senior partner is still very beneficial, he says. “They’re both working to build what will ultimately be the younger rep’s brand. And having more two generations working together can vastly can expand their market.”
Managers should give millennials specific goals and incentives to meet them, Cass says. “As they do, give them more and more responsibility. This will help them see the light at the end of the tunnel.”
Though they’ve been pampered and nurtured since childhood, says Bruce Tulgan, founder of Rainmaker Thinking in New Haven, which studies different generations in the workplace, “Millennials have also been programmed to engage in a slew of activities. So, while they may be high maintenance, they’re also high-performance multi-taskers who juggle their emails on their Blackberrys while talking on cell phones and surfing the web.”
“They do bring a better balance to their life outside of work and focus more on social issues,” says Roame. “Job sharing, telecommuting, part-time work, social capital, volunteer opportunities, etc. will all become more important parts of compensation than just money.”
The keys to managing Millennials are to make them feel special, appreciated and an important part of the team, Werlin says. “After all, these are the kids who got trophies for just showing up.”
Still, there are many misconceptions about them to clear up, says Tulgan, who’s written several books on the generation, including, Not Everyone Gets a Trophy: How to Manage Generation Y. “They don’t need you to make work seem like fun,” he says. “They don’t mind doing grunt work as long as it is recognized and helps them meet their goals. They want to be taken seriously and considered valuable assets to your team. They don’t want you to pretend they’re winners; they want you to help them win.”
Obviously, the key to effectively managing FAs of any generation begins with good communication, Werlin says. “Take time to really listen to your advisors,” he says. “Give them constructive feedback, and always bear in mind the potential implications of your actions. Good managers know that everyone has different values, perspectives, motivation and skills, regardless of their age.”
For example, Roame – who was born the first year of Generation X—says he works “with so many Baby Boomers that I really identify best with them.”
“Don’t ask for someone’s driver’s license and develop a management plan there,” Tulgan says. “Defining different generations creates a lens through which to see where someone might be coming from. But, adapting your management style to fit each individual will undoubtedly yield the best results.”