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options and compensation negotiations , will pay a higher planning fee , she says .
“ We wanted to charge in the same manner for all clients ,” she adds . “ We didn ’ t want to make next-gen clients think , ‘ Oh , you ’ re different ,’ because we anticipate they ’ ll become full-fledged clients in the future .”
By design , Aspiriant ’ s next-gen effort has brought in 27 younger clients in its first three years , and the firm plans to add another 12 or so clients this year , says Doder , noting that the firm wants to “ serve , but not overserve ” clients in growth mode .
“ It is difficult to make money on nextgen clients in year one , but this is an investment in long-term , profitable relationships ,” she says .
She adds that Aspiriant ’ s emerging wealth offering also provides “ an incredible training opportunity for younger advisors ,” who receive a bonus for bringing these clients in . “ This offering gives them something to talk about with their own network instead of telling prospects they don ’ t meet our minimum ,” Doder says .
Kamila Elliott , the co-founder and CEO of Atlanta-based Collective Wealth Partners , created her firm with three partners a year ago , and it ’ s geared almost exclusively to next-gen clients . The four partners are Black and cater to Black executives , professionals and business owners in earning mode , she says . ( Elliott is also on Financial Advisor ’ s 2023 list of “ Young Advisors To Watch .” See page 40 .)
Elliott worked previously as an advisor at another firm for three years where the service offering wasn ’ t as “ high touch .” Now she and her partners focus on individuals who may not yet have significant assets , but have the potential to grow impressive wealth over their lifetimes . The Collective advisors help these clients check all the boxes , aiding them with first home purchases and student debt , she said .
“ It ’ s so enjoyable to help these clients reach major milestones to building wealth , especially since many are my age .”
— Kamila Elliott , CEO Collective Wealth Partners
Collective brought on 200 clients in its first year and has garnered 23 clients so far in 2023 . The firm offers holistic wealth planning for an annual subscription fee of $ 4,000 for single clients and $ 6,000 for couples . Collective also charges a separate fee for business owners , which is the greater of $ 10,000 per year or 1 % of assets under management .
It ’ s a lot of heavy lifting to work with next-gen clients initially , Elliott says , since in the first year they need “ just about everything ” from first-time home-buying expertise to insurance and estate planning advice . But she adds that eventually there ’ s an inflection point and they turn into lifelong clients with significant wealth .
“ It ’ s so enjoyable to help these cli- ents reach major milestones to building wealth , especially since many are my age ,” she says .
Calabasas , Calif . -based Morton Wealth manages $ 2.5 billion for 1,100 clients . McKinnon , the firm ’ s chief marketing and chief operations officer , says Morton just did a soft launch of its “ ModEarn by Morton ” service offering for next-generation clients . The firm plans to do a hard launch May 19 .
Clients in this channel pay a $ 6,000 annual subscription fee for a wealth plan that targets their needs one month at a time — from developing a spending strategy and insurance planning to ensuring they manage debt , maximize credit , optimize stock options and make wise real estate decisions , McKinnon says .
“ We are targeting earners . It ’ s a funnel for those who will become Morton wealth clients in eight to 10 years ,” she says . “ I know this can be a little bit of a struggle for advisors to get their head around , but I ’ d rather take on a 32-yearold client who makes great income and very good decisions with their money than wait until they ’ re 55 and have to compete to get them .
“ We ’ ll make a little less on the front end ,” she adds , “ but think of the years of reoccurring revenue .” Still , she adds , “ this is not a low balance offering . We are targeting clients who have complicated lives , side hustles they ’ re trying to decide whether to turn into an S corp . or limited liability corp . They need a corporate retirement plan and to make wise decisions about stock options and investment real estate . These aren ’ t college students who just graduated .”
Morton plans to take on 20 of these younger clients this year . McKinnon estimates the firm will earn a 15 % profit margin on its first crop of these clients with its investment in marketing , technology and credit card payment options in year one . “ But in year two , when we expect to have 40 clients , the profit margin goes to about 40 %,” she says . She predicts “ ModEarn by Morton ” will become a significant chunk of the firm ’ s business over the next three years .
30 | FINANCIAL ADVISOR MAGAZINE | MAY 2023 WWW . FA-MAG . COM