Dr. Cole Cash and the Next Generation

My first book came out not too long ago, and people said, “Cole, are you happy with the way your book turned out?” And I always say the same thing. I tell ’em, “I don’t know if I like the book; I haven’t read it yet!”

That’s a joke, and a lame one at that, because ol’ Cole worked like a demon, not that we like demons here in the South, but I worked incredibly hard to make that book useful to advisors. I won’t recap my own story too much here, because I don’t like tooting my own horn. OK, I do. One time, they gave me an award for humility. I accepted it, so they took it away.

But seriously, folks, I was always interested in human psychology, from the time I was a little critter growing up in a “we didn’t even know we were poor” kind of neighborhood not far from Charleston, where I live and breathe today. I was the first in my family to college, the first to grad school, and the first to put on a tie even if I wasn’t going to church or the place where they say, “Will the defendant please rise?” I don’t have to wear ties today, because everybody believes in business casual. Actually, I don’t. I think it’s really nice when grown-ups dress like grown-ups. I wouldn’t take any financial advice from a guy who’s wearing his baseball cap backward. I might allow him to box my groceries and haul them out to my truck. But you didn’t pick up this book to hear about my likes and dislikes. You’ve presumably picked up this book because you’re an advisor, you know that people are funny about their money, and you’re hoping I will, once again, share something from my case files that can help you do your job even better than you do it right now.

So now that we’ve established who I am and who you are, let’s get down to the cases. If you happen to have read my first book – and just for the record, I also read it, because I wrote it – you may remember the case of a very fine financial advisor that we named Glenn Mathers to keep his anonymity, a former Navy pilot, a real Top Gun, a guy who has kept his trim form and looks like he wouldn’t be out of place in a pilot’s uniform for American Airlines or one of those airlines where they still make their pilots dress like they’re in the military. (As you can imagine, I like that.)

Well, now, Glenn came into my office a ways back, concerned about how to compete with the robos and how to deal with the next gen. Rather than reiterate – which is a fancy way of saying repeat – what I told Glenn about robos in the first book, I cordially invite you to go out and get that book, and see for yourself. That way, ol’ Cole racks up another royalty! A few dollars here, a few dollars there, and they just might add up to something someday! But what I’d really like to talk to you about right now is what Glenn came back to talk with me about just this morning.

Young people.

For those of you keeping score, the course I suggested to Glenn to stop all the assets under management (AUM) from walking out the door – all too often to the Maserati dealership once his clients’ kinfolk get done burying it – is to sit down with the next gen, the children and grandchildren and great-grandchildren of his current clients, and just get to know them. See what makes them tick. I told him that he didn’t have to sell them anything or convince them to stay with the firm. But I did suggest to him that if he didn’t do some sort of outreach, as soon as any client was dead and gone, the next gen would be long gone.

Glenn dropped me a note the other day to say he had taken my advice – why not, I’m not using it – and over the course of two months, had sat down with about fifteen members of the next gen. They are the young people who stand to inherit, squander, or ideally invest the hard-earned dollars their parents or grandparents will be putting in their pocket. He said that, by and large, the meetings went well, although it didn’t really feel as if anything important happened. He said he wanted to come back to the comfy chairs in my attractively designed professional office suite, of which I am justly proud, having never seen the inside of any office except for the principal’s office before I was eighteen years of age, and just talk things over a little more.

Naturally, I was delighted. So at 10:00 a.m., right on the button, I peered into my equally well-appointed waiting room – where our magazines are current, by the way – and there sat Glenn, lost in thought, his bearing upright, wearing a nice, expensive suit with a pocket square and no tie (which I, being so old-school about these matters, still find slightly jarring, but that’s the uniform today, so who am I to cavil?). Cavil is another word I learned studying Webster’s Dictionary, which I do for fun sometimes, and I’m darn proud of knowing it. It means to criticize or complain.

“Glenn?” I said gently, not wanting to jar him since he was so deep in his own thinking.

“Oh!” he said, startled. “Dr. Cash, so nice to see you again.”

He rose (regally) and extended his hand, which I shook. I then led him to my office.

For me, one of the biggest tells is whether a patient – I actually call them clients, because patient makes them sound like they have some kind of illness or disease, which they don’t – aims for a chair or for the couch. If they head for a comfy chair, it means that what we are going to get into will be pretty easy to handle. If they aim for the couch, it means they’re kind of down in the dumps and that ol’ Cole is going to have to work twice as hard to earn his daily bread.

Glenn headed straight for the couch.

Yikes.

“Where shall we begin?” I asked pleasantly.

Glenn sighed.

“I did what you told me to do, Dr. Cash,” he began, and I’ll tell you what – he didn’t sound like his usual confident self. “I sat down with a whole bunch of the next gen. Seven kids, five grandkids, and three great-grandkids – from eleven different families.”

I like a man who keeps things organized, I thought, but said nothing, just waited.

“The meetings were pleasant enough. You told me to get over the idea that I am too old, and that my gray hair actually means ‘information station’ – not ‘relic.’ And you told me not to try to sell them anything. I just sat down with them, and shot the sh – the breeze.”

Ol’ Cole always says that the absence of profanity will offend no one, so I was impressed that Glenn wanted to keep our conversation rated G. Not that it matters, but still.

“Glenn, ol’ boy, you look like you lost your best friend,” I observed. “Did anybody say something that offended you or hurt your feelings in any way?”

Glenn shook his head quickly.

“Nothing like that,” he assured me. “Nothing at all like that. Instead, I just got the sense that, well, nothing happened.”

“Nothing happened?” I repeated.

One of the tools of the trade ol’ Cole learned long ago is that if you don’t have anything intelligent to say, just repeat back the last few words the client said. That way, you’ll sound intelligent without having to put any real thought into it. Not that I mind thinking. I just didn’t have enough yet to think about.

“Nothing went wrong,” Glenn allowed. “But nothing really went right either. I asked them about where they were in life, what they did for work or if they were in school, relationship status, things like that. And they basically opened up and told me about themselves. But after every single meeting, they all acted like they had no idea why we had sat down. And I had no idea, since I had nothing on which to close them. I’m a closer,” Glenn said with a grin. “We all are, in my profession. Even if we’re very subtle about it. So if I don’t have something to sell, whether it’s an idea, an approach, or a new client to bring in, or whatever it is, I feel somewhat at sea.”

“You wouldn’t think a Navy man would mind feeling at sea,” I said, and that broke the tension.

“Not without a big battleship around me,” Glenn said, laughing. “Although I’m happiest when I’m in my pilot’s seat, this is not the kind of ‘at sea’ I’m comfortable with.”

“I hope you’re not mad at ol’ Cole for putting this particular bee in your bonnet,” I said.

“Oh, no, not at all,” Glenn insisted. “I think it was a brilliant idea. How am I going to keep them in the fold if I don’t even meet them? So I’ve got no problem with what you suggested; I’m just a little confused as to what the point was.”

“It was a starting point,” I said. “We’ve got to get you comfortable with these folks, or else – ”

He put up a hand to interrupt me.

“I know what the ‘or else’ is. We’ve already lost tens of millions of AUM as our clients passed away. It’s a really painful thing. You lose a relationship with a client that goes back decades. And then you feel as though you’re not able to do the next gen any good because you weren’t there to make suggestions or get them squared away. So it’s just a big unhappy situation.”

“Which we are going to alleviate, right?” I asked.

“Right,” Glenn looked relieved, but just as quickly, concern etched itself back onto his face. “But how?”

“Tell me, what was the overall feeling you had as you were talking to the young people?” I asked, probing gently.

Glenn looked thoughtful. He paused before he spoke.

“I would say . . . ,” he began, his voice trailing off as he looked around my office, as if the answers were to be found somewhere. “It felt as if they were meeting with their parents’ or grandparents’ advisor, but they had no idea why they were having that meeting. That’s the troubling thing.”

I nodded.

“That’s it exactly. They’re still thinking of you as mom and dad’s advisor, not their advisor. That’s a shift we have to make.”

“But how?” Glenn asked, looking genuinely perplexed.

I nodded. I’ve got this, I thought.

“They’ve got to feel that you are their advisor too.”

“I haven’t the slightest idea how to make that happen,” Glenn admitted. “After all, I am their parents’ advisor, not theirs. And on top of that, they don’t even want financial advice.”

“And why might that be?” I probed gently.

He thought for a moment.

“I’ll tell you why,” he began. “And quite frankly, I would feel the same way. Look, I’m in the business of retirement planning. I’m working with people who, by and large, are either starting to think about retirement, within a year or two of retirement, or already retired. Pretty much everything I do – every step I take, every decision I make, every piece of advice I offer – is geared to help people think about retirement.

“No, these younger people, they’ve never thought about retirement a day in their lives. It’s just . . . too far beyond their comprehension. It’s like telling them they’re gonna die one day. When you’re their age, you’re invincible. Death isn’t a reality for you. In some ways, you court death. You bungee jump. You hang glide. You do all these things that are stupid when you’re our age, or at least my age. I think I’ve got about twenty years on you. But at their age, it looks like the most intelligent thing in the world to do. It looks cool.”

“But there’s nothing cool about retirement, is that it?” I asked.

I always like it when the client gets the answer without my having to tell them the answer. I don’t get to look as smart, but on the other hand, they tell their friends that, and then their friends come and wear out the upholstery in my well-appointed office and waiting room.

“There’s nothing cool about retirement for young people,” Glenn said. “It’s absurd. It’s like you want to make them take their hard-earned money and transfer it to some old person who they’ve never even met. I mean themselves, decades from now. So if I’m trying to sell them on retirement, I’m going to fail ten times out of ten.”

“At a minimum,” I agreed.

Glenn smiled.

“Ten out of ten, at a minimum,” he agreed. “It’s a total disconnect. I sell retirement, and retirement to them is about a million years from now. It’s the last thing they think about. In fact, it’s not even the last thing they think about because they never think about it! So why wouldn’t they see me as their parents’ advisor, and not theirs? I’ve got nothing they want.”

“Hang on,” I said, leaning forward, which is what I do when I’m excited, and I was very excited. “You do have something they want, but it sure isn’t retirement.”

Glenn looked baffled.

“Dr. Cash,” he said plaintively, “I’m a one-trick pony! All I know is retirement planning. I could write books about it. I give speeches about it! But that’s all I know. I think I’ve got no shot with these kids.”

“Respectfully,” I began, “I think you are mischaracterizing your knowledge base and your abilities.”

“Really?” Glenn said, sitting up on the sofa. “I’d love to believe you, but I have a hard time doing so.”

“Last time I checked,” I began, “you were billed as a financial advisor, not a retirement advisor.”

Glenn nodded.

“So where does it say that your advice has to be restricted to retirement?”

“But that’s what I know,” Glenn replied. “That’s the alpha and omega of what I have to offer.”

“Respectfully,” I said again, “in addition to the alpha and the omega, there’s also a beta, a gamma, and a delta. There’s a whole fraternity of things that you offer that aren’t about retirement.”

“Such as?” Glenn asked, sounding doubtful.

“Look,” I said. “The same skills that apply to putting money away for retirement also apply to putting money away for anything. Right?”

Glenn thought for a moment.

“I suppose,” he said. “Never really thought about it that way. But I suppose.”

“All right, fine.” I said. “These next-gen folks. They must want something. What do they want?”

Glenn shook his head disdainfully.

“I’ll tell you what they want,” he said, looking none too pleased. “They want to go to Vietnam for eight weeks and windsurf. Back in the day, if you wanted to go to Vietnam, all you had to do was wait for a letter from Uncle Sam. He’d send you there for free.”

“But they wouldn’t let you windsurf when you got there,” I said.

“No, that wasn’t on the menu,” Glenn agreed.

“I sense a trace of hostility about their desire to go to Vietnam to windsurf for eight weeks,” I said as gently as possible.

Glenn looked away. He bit his lip.

“Maybe,” he allowed.

I waited.

“Their whole ethos is so dumb!” he exclaimed with more than a trace of bitterness. “Who does that? Well, they all do that! When I was growing up, if you didn’t come from money – and I didn’t come from money – you went into the military or you got a job. And once you had a job, you didn’t let go of the job. You were grateful you had it, you worked hard, and you built something. You didn’t go off windsurfing in Vietnam for an eight-week stretch. Your job was your job. You know what I’m talking about, right?”

I nodded.

“I came up the same way you did,” I said. “But it’s a different world today.”

Glenn nodded, but he didn’t look too happy about the way the world is.

“You’re an entrepreneur,” I said. “You built a business. Most people are not entrepreneurs though. They go to work for companies. Your next gen saw their parents and grandparents work day in and day out for twenty-five years for XYZ Corp. And then XYZ Corp. got bought or sold or merged, and then Dad or Grandpa, or for that matter, Mom or Grandma, got downsized, rightsized, outsized, and basically turned every which way but loose.”

“What’s your point?” Glenn asked, confused.

“The younger people today,” I continued, “saw that the basic social contract their parents and grandparents had bought into . . . well, it vanished. There was supposed to be a sense of two-way loyalty. If you worked for an employer, and you gave the best years of your life to that employer, then the employer was supposed to take care of you in the lean years.

“And then that social contract vanished, with all the corporate raiders and all the Wall Street shenanigans we both know all about. The next gen saw their parents and grandparents get, basically, kicked to the curb by the companies they worked eighty hours a week for. And you know what they tell themselves?”

“Not me?” Glenn asked, the light slowly coming on.

“Bingo!” I exclaimed. “We like to knock the next gen and say they are lazy, or they came up soft. They definitely came up softer than we did, a lot of them. That’s a fact. But if you’re going to look at their lives strictly in judgmental terms and say, ‘They’re not good people because they don’t put work at the center of their lives,’ you’re kind of misunderstanding who they are and how they got that way.”

Glenn crossed one leg over the other and stared into space. I didn’t say anything because there was really no reason for me to say anything. I just wanted for him to absorb what I considered a home truth.

“And maybe they are wrong,” I continued. “I like what Ronald Reagan said about hard work: ‘It’s true that hard work never killed anybody, but I figure why take the chance?’”

Glenn laughed.

“I’ve got people in my office,” Glenn said, “really good members of my next gen. Good advisors. A little wet behind the ears, but getting it. And sometimes in the past I’ve said I need a financial plan done over the weekend. And they just look at me and say, ‘I can’t. I have a triathlon.’ I didn’t even know what a triathlon was, but I looked it up. And once I knew what it was and I saw that they were serious, that they were going to do that race and not the financial plan, I got the memo. Stop asking.

“I did all the running I ever wanted to when I was in the Navy,” Glenn continued. “I kind of agree with what some folks say about exercise: ‘I believe that every human has a finite amount of heartbeats. I don’t intend to waste any of mine running around doing exercises.’ But I respect the fact that this is what they want to do. This is who they are.”

I nodded in agreement.

“That’s just who they are,” I said. “So that leaves you with a choice.”

Glenn looked at me with surprise.

“A choice?” he asked, his eyes narrowing slightly. “What kind of choice?”

It looked as though whatever the choices were going to be, he wasn’t going to like them.

“You tell me,” I said, trying to sound as casual as possible even though we were coming to the nub of the issue.

Glenn stopped and thought. He scratched his chin and stared at the sky outside the window, as though the answer was written somewhere in space. It wasn’t. The answer was written somewhere in his own mind, and he knew it. He just had to find it himself, or it wouldn’t mean as much.

“I can either accept them for who they are and respect them for who they are,” he began, sounding none too pleased about it, “or I can just kiss them and their assets goodbye.”

I nodded.

“That’s about it,” I said. “Although I’m not sure I like the way you said ‘kiss their assets.’ That sounded a little dirty.”

Glenn laughed.

“OK,” I said, putting my serious face back on, “we’ve established that you can either accept them for who they are and understand where they’re coming from, or you can keep on judging them, and there won’t be a next gen to your firm. Those are pretty much the options, right?”

Glenn nodded.

“That’s a stark choice,” he said, “but it makes sense. I think you’re right.”

“I beg your pardon?” I said, cupping a hand to my ear.

I’d heard him fine. Ol’ Cole just likes it when he hears people say he’s right. I’m a married man, so I don’t get that very often.

“I said you’re right,” Glenn said.

I nodded in gratitude and kept going.

“OK, how can you use the skills you have to serve the next gen right now, without waiting for them to start thinking about retirement?”

Glenn thought for a moment.

And then another moment.

And then another moment after that.

“I can show them how to save so they can get those eight weeks of windsurfing in Vietnam.”

Boys and girls, a wide smile spread across my face. That’s exactly where I wanted him to go.

“What else could you teach them to save for?” I asked, probing gently.

“Whatever they want,” Glenn said.

“Such as? What do they want?”

“Let me put myself in their shoes for a minute,” Glenn said.

I nodded approvingly.

“That’s exactly what you want to do,” I said. “Put yourself in their shoes. Where are they in life, and what do they want? What would they have to save up for to get?”

“Well, they can just go to mommy and daddy, and – ” Glenn began, and then he stopped. “There I go again,” he admitted, sounding lame. “I never realized just how much I judge these people for coming from money. I guess that’s why I never wanted to meet them.”

I said nothing, which was exactly what needed to be said.

“They want a house,” Glen said. “They want to stop renting and start owning.”

I nodded.

“What else?”

“I don’t know!” he admitted, looking at me for answers.

“I have an idea,” I said. “Can you guess what it is?”

Glenn gave me a sheepish grin.

“I can ask them,” he said.

“Precisely,” I said. “Do you have any more meetings with next-gen folks on your calendar?”

“Truth be told,” Glenn admitted, “I don’t. I figured I’d checked the box on your assignment, and I was done with that. But what I ought to do is get some more meetings, either with those folks or other ones. Other children or grandchildren of my current clients. And I will just sit them down and ask them, what would they like to have that costs more money than they can afford to pay right now?”

I gave another approving nod.

“And then what?” I asked.

“Show ’em how to save for it and get it?” Glenn asked.

“That’s about right,” I said. “See what they want, and then use the same skills that you have as a retirement planner to show them how to plan and get whatever they want next . . . as long as it isn’t illegal, immoral, or fattening.”

Glenn giggled.

Yes, reader, my hand to God, the former Top Gun Navy pilot seated on my hard-case couch actually giggled.

“I’ve always seen myself as a retirement planner,” Glenn said, “because I’ve always dealt with people in regard to their retirement. But what I am is a planner, period! I can show people how to plan for anything! Maybe they want a baby. Maybe they want to start a family, but they’re afraid of how they’ll pay for the kid’s college, or whatever.”

“Maybe that’s what they want,” I agreed, “but you won’t know until you ask them. Then, once you ask them, you can show ’em how to get it.”

Glenn practically leaped off the sofa, then stuck out his hand for me to shake.

“Dr. Cash, ol’ boy,” he said happily, “I get it! I just have to get these people into the habit of planning, saving, and enjoying what comes. Isn’t that right?”

We shook hands.

“Roger that,” I said, trying to sound military.

“There’s only one problem,” Glenn said, suddenly looking distressed again.

I’d like to tell you I hate when that happens, but I don’t, because when clients realize that there’s something else that has to be solved, it means they’re going to come back for more.

“They’re broke,” he said. “They can’t pay for the services we offer. They’ve got no A for us to put UM,” he said, referring to assets under management.

“I believe in solving one big problem a day,” I said. “Could we table this question until next time?”

“Deal,” Glenn said, finally releasing my hand; he still had a pretty strong grip for an ol’ boy like himself.

He pointed a long finger at me.

“You’re the real Top Gun,” he said, and he smiled as he headed out of my office.

‘The real Top Gun.’ I like that, I thought as I watched him go.

Matt Reiner is a CFA, CFP®, and partner at Capital Investment Advisors, a $2.8+ billion RIA in Atlanta. Reiner is also CEO of Wela Strategies, a sister company to Capital Investment Advisors, and is the founder and CEO of Benjamin™. Benjamin is an AI technology created by Reiner after seeing the gaps in technology used in his own firm. Reiner's true passion is using his vast experience to coach other advisors across the country, helping them evaluate their firms' practices and find the best strategies for future success. To reach Matt Reiner, visit www.MattReiner.com.

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