Viewpoint: A conversation about Principal Financial's boomer-millennial strategy

John Hoffman was considering careers in law or foreign relations when the Minnesota State University, Mankato graduate was recruited by a Principal Financial agent to join him in Sioux Falls, S.D., as a financial adviser.

About 18 months later, the Iowa-based financial services company transferred Hoffman to the Twin Cities, and in 2009 he was named Minnesota managing director.

Hoffman attributes part of Principal's success in Minnesota over the past decade to "multigenerational adviser teams'' — primarily baby boomers and millennials.

Q: What's happened over the last decade?

A: We've more than doubled; we're about halfway to tripling the number of advisers we have in this market. It was pretty much flat the 10 years before that. We have about 70 full-time advisers and 30 contract brokers, about 105 people that we have [regulatory] supervisory responsibility for. And we have 25 to 30 staff members. The business is growing.

Q: What's your business strategy?

A: Principal offers wealth management and employee-benefit services to businesses and individuals. Our target, and it's a growth market segment in Minnesota, is small- to midsize businesses, growth businesses. We've got a very good group of advanced market advisers who work with business owners, key executives and employee groups with group insurance and retirement products. Everybody else is going after the affluent [individuals]. If we can get a company of 100 employees, work with the owner and key executives individually … that's been a successful niche-market play for us.

A: I find that blending generations for working together on client teams creates productive synergies that in turn serve our clients well. It's working. Primarily baby boomers and millennials. Generation X, the generation between them, is more independent, less patient and more competitive. The financial services industry is a good place for boomers. We're still hiring them, and I'm pleased with the results.

Q: Why is it important to have mixed-age teams.

A: Some clients demand it. No longer can one adviser be expected to have the depth of understanding required for all the changes in our industry. It's advantageous to blend the wisdom and experience of boomers with tech-savvy millennials who have energy and potential. They learn from one another.

Sometimes the teams are put together more deliberately. And sometime people just come together. It's never been more prevalent than today. We found that the boomers, age 50 and older, and the Gen Y, who are in their early 30s to late 20s, really work well together. A 70-year-old may want an adviser with gray hair. But the client may want a younger person with new insights in technology and a second opinion. That 35-year-old client may want to hear from somebody with a few decades in the business to give some perspective on the plan. There are many plans …. and one may be a retirement product or a new style of financial planning, replacing the old yellow pad.

We're also seeing that boomers are interested in joining us. If the work is meaningful and offers the opportunity to use skills honed throughout their careers. Some have to work because of what the [Great Recession did to their employment and retirement earnings]. And for some, it's not about the money. It's about staying involved and contributing.

A: Blended teams contribute to retention, especially holding on to younger advisers. There's a mentoring relationship that develops. And although advisers are entrepreneurial when it comes to building business, they find it advantageous to be able to coach younger members of the team who one day will transition into taking over, making it a seamless transition for the client. The more competent the millennials become, the more responsibility they can take on.

Q: Give me an example of how 60-year-olds and 30-year-olds collaborate?

A: We have boomers on board who have been with us for 30-plus years and are our senior advisers who work with the 20 percent, our top clients. They coach, mentor and advise the younger members of the team who serve the remaining 80 percent of our clients. We call this our version of succession planning; younger team members will be in place and familiar with clients when senior advisers retire. The 30-year-olds feel it's advantageous to draw upon the expertise of senior advisers. It's a joint-work culture. They figure if boomers can guide them in fast-tracking it to success, great.

We do have work-style differences. Our more senior, high-end advisers might be in the office on a Saturday morning doing what's needed in order to be ready for meeting the client on Monday morning. They wonder why the younger team members aren't doing likewise. Younger advisers may well have prepared by heading out of the office on Friday afternoon to sit on their decks [with remote technology] planning and organizing the material needed for that meeting. They're very mobile.

Q: Do you require folks to work together?

Q: Does mixing generations help the younger advisers get a toehold?

A: The industry retention rate after four years is 10 percent. That needle hasn't moved much. It's expensive to bring them in, train them, plug them into business markets. We shoot for 60 percent over four years. In Minnesota, we're over 50 percent. Principal overall is more than 30 percent.