Next Generation Clients

Serving the Next Generation of Advisory Clients

  • The younger generation of clients are more detached from the relationship their elder generations strived to attain
  • Advisors stand to benefit from more actively incorporating cost into their presentation to prospective clients
  • Technology is bridging the gap between the transition of the older and younger generations by providing robust methods of preforming and displaying due diligence and benefits of service

A significant amount of focus has been set on how to sell to the next generation of advisory clients; the millennial and post-millennial generations. With the oldest millennial now approaching their 40s this conversation is not new by any stretch. With the tail-end of the millennial generation now entering into adulthood, it is still imperative to recognize that this conversation is still evolving.

Although the tenants of a sound financial plan are largely the same as they were years ago, the demands of effective business proposals have evolved with the transition between the older and younger generations. To the older generations the business they do with a financial advisor is still largely founded on a trusted relationship. The details of how their plan is formed and executed are generally secondary to their ability to sleep at night knowing the person behind it. Conversely from this, millennials “have become rather wary of financial advice given by…professionals in the field” (1) according to Forbes. Much of the way that millennials transact within financial services may be best understood by what the retail industry has observed well before millennials considered the services of a financial advisor. In a research study done by Accenture, millennials were noted to be advocates of vigorous transparency and were willing to spend significant time on seeking the best price without losing desired qualities (2).

So what should the financial services industry be taking into account? How can we better capture a market that looks to pay less and receive more?

“Where is the bargain?”… Traditionally in sales relationships across the service industry the seller is pre-dispositioned to allocate a significant portion of their time explaining the benefits of their service. Subsequently, the cost of the relationship is not necessarily forgotten by the seller, however is disproportionately not in concert with the value a financial advisor can provide.

               The millennial generation as noted is very cost conscious. Their awareness of alternatives, especially when it comes to the financial services industry, are evermore being broadcast onto main stream media outlets and will continue to grow further visibility. Using a detailed cost-benefit analysis as the basis of a prospect presentation could be effective.

Cognizant of external fees…Putting aside another remark on generational importance of cost, a display of effort to put a prospect/client within a low cost investment structure can provide a difference. Being a generation that has been noted as strong advocates for comparing prices and lowering costs, an advisor who displays such an internal effort stands to potentially benefit and gain the trust of a millennial prospective client through such transparency.

Education…NerdWallet notes that “millennials have largely resisted investing, instead favoring “safe” vehicles like savings accounts and plain cash” (3). Most are quick to point to the experience of the 2008 financial crisis as the starting point of why a significant portion of the generation has yet to take a leap into market participation. However, largely this is due to the vacancy of education on the benefits of taking managed amounts of risk.

How can technology bridge the gap?…

               Today’s financial technology has largely been able to accommodate for many of the needs of the next generation of clients. Through its capability of increasing the efficiency of identifying investment options, utilizing modern computing systems, and providing suitable output for client facing proposals, the due diligence preformed is more easily identifiable. In particular these tools are often able to quantify and clearly display the benefits an investor stands to potentially receive, allowing the individual to make informed choices when deciding between services.

Click here to see an example of Portformer’s output


Andrew Kebalka

Customer Success | Research | Business Development

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