Tapping into the next generation: A specialised approach

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Not many people can say they found their dream job at age 14. But for John Cachia, founder and CEO at Australian Financial Advisers (AFA) Group, the road to advice was fast and direct.

After gaining work experience at his Uncle’s advice firm at aged 14, Cachia continued working in the business outside school hours, and was writing SOAs at aged 16. When he finished school, he continued working full time, while also studying full time, and completed his diploma in financial planning during University holidays. The hard work paid off, and by aged 20, Cachia was running his own financial planning business.

A lot of people said it was going to be hard, but age was never an issue for Cachia. “When I look at myself at 20 years old, I knew what I wanted to do and I knew what I needed to do to get there.”

Cachia says his youth is helpful in successfully advising his client base, which is mostly Gen X and Y. Passionate about helping the next generation, he says that advisers need to change their approach to delivering advice if they want to tap into this underserviced market – which has plenty of potential.

“The younger generation is underserviced. And I don’t think it’s that they don’t want advice, I think it’s that advisers don’t know how to deliver that advice,” says Cachia. “It’s not taught at Uni, it’s not taught in your diploma, it’s something that you’ve got to learn along the way.”

With a third of the population retiring in the next 10 years, Cachia says advisers are too focused on chasing funds under management, and not thinking about what happens after that.

“There’s a massive amount of wealth getting interchanged from baby boomers to their children and if you’re not on top of that, in 20 years’ time, what’s going to happen?”

He says there are a lot more variables when advising the next generation. They set goals for the next two to five years, and will often have credit card debt, want to save for a house, get married, and go on holiday, while also saving for retirement.

“The industry itself needs to ask what the next generations’ needs are. Wind back 30 years and think about what you needed at 25 years of age.” Cachia says that most clients of the next generation need guidance, someone to hold their hand, and someone to bounce ideas off. “We need to give them direction. Every single person that comes in says ‘I need financial direction’.”

Instead of focusing on funds under management, Cachia says it is important to look at the cashflow side of things. “We work with people to start building up their wealth, looking at their cashflow. It doesn’t really matter what their cashflow is, everyone’s got an income we can work with...it’s a little bit of coaching as well.”

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  • KP on 25/06/2013 10:19:10 AM

    I'm not sure that's true Merv, I advise lots of aged care clients and I am decades off needing aged care. Life experience is important as is communication skills but there should be nothing stopping us providing advice to all irrespective of age.

  • Merv Gay on 24/06/2013 9:52:37 AM

    Yeah okay - well a lot of twenty somethings have no idea how to deliver advice to over thirties, let alone discuss financial issues with over forties and fifties so what's the difference. You ideally are at best with those five years younger and older than yourself and that's where most of us fit, because we've been or are going where those to whom we advise wish to know about.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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