The ‘Great Wealth Transfer’ is well and truly underway with more than £5.5tn expected to change hands over the next 30 years.
This shift presents a huge challenge and opportunity for financial advisers as they look to build new relationships with the younger generations of families that they’ve historically worked with.
There is also an opportunity for firms to win entirely new business from the wave of Millennials and Gen Zers who will be seeking professional advice on how to preserve and grow the money they’ve inherited.
So, how can advisers boost their chances of doing this successfully? Here are five steps for firms to consider.
1 Personalise your services, even if not in person
How people manage their money is incredibly personal, and so it is important that advisers make sure that the advice and services they provide is personal too.
You need to understand your client’s goals, fears, hopes and dreams. This has always been important, but some advisers might have lost sight of this in today’s increasingly digital world.
Instead they should be using the increasing amount of data available to them to their advantage, and analyse it to understand their customers' behaviours and preferences as much as possible.
2 Create engaging thought leadership
Offering current and relevant tips, tricks and insights will be critical for success.
Some firms might already be creating this content but is your target audience seeing it?
Advisers need to meet clients where they are. This could include social media or other digital channels.
You can no longer afford to sit still and hope that clients and prospects will take the time to find your content on your website.
3 Make DIY research available
We’re seeing an increasing number of fintech firms developing and rolling out interactive content and research tools.
This will be highly valuable to younger investors who prefer to do their own research online.
Interactive tools, calculators and simulations to show scenario-based outcomes will help these tech-savvy clients make informed decisions for themselves.
4 Invest in your digital capabilities
There are few firms that have a true one-stop shop for the full financial relationship, but this is what the next generation of wealth clients will demand.
If they haven’t yet, firms should consider developing apps where clients can have a clear, instant view of their entire relationship across deposits, investments and lending, transact seamlessly, and use it to easily pull funds from any account to cover purchases.
Firms can also invest in tools that will bolster client communications.
5 Ensure the price is right
Younger generations have grown up with high rates, low or no fees, bank accounts, lower mortgage rates and credit cards that are bundled with endless rewards.
Advisers need to be ready to justify their price strategies. Understanding the value these next-gen investors place on particular services and then aligning pricing strategies appropriately is key for creating a profitable operating model.
These may well be suggestions that adviser firms have considered in the past but now is the time to take action to ensure that their business model is future fit.
