How Advisors Can Effectively Reach the Next Generation of Clients

Written By: Stephen Frick | Wealth Manager

When working with clients, building strong, genuine relationships is crucial. Not only should advisors strive to establish a rapport with the individual managing the household money, but they should look to proactively connect with their clients’ children as well. Treating the next generation as a client from the very beginning can have great benefits down the line when the family wealth is transferred to them and as you continue to foster your book of business.

According to a Broadridge Financial Solutions survey of millennial investors, over half indicated that they would consider working with their parent’s advisor, but of those whose parents have an advisor, only 20% have actually met them. This underlines the importance of building a relationship early and creating opportunities to engage your clients’ children. Here are four key considerations when approaching the task of effectively reaching the next generation:

  1. Welcome the digital era – The next generation of investors are much more digitally savvy than the baby boomers that advisors are used to working with. Although some people stereotype millennials’ constant attachment to their cell phones as a negative thing, it also presents them with an entire world of information right at their fingertips. This can make some very sophisticated investors because of the vast amount of knowledge they consume, but they may not know how to apply it. This is where you come in. Understanding that digital platforms are important to them, and catering how you distribute information to them around this will go a long way.
  2. Determine the next generations’ values and purpose – A crucial element to understanding the next generation on a personal level is getting to know their values. Millennials are much more purpose driven than previous generations and this reflects in their investment choices. The amount of money poured into ESG funds in the year of 2020 alone more than doubled over the previous year. This is because investors are coming to the market with intent and purpose behind their investment choices from a social standpoint. As an advisor, being equipped with the knowledge to apply their values to their money will go a long way for the younger generations.
  3. Treat them as a completely new client – The next generation is not going to think like the previous one. Many will view you as “their parents’ financial advisor” or might feel that they barely know you and therefore, can’t trust you with financial decisions. Finding ways to show them that your financial advice and approach is customized to the individual is a top priority.
  4. Extend yourself as a resource – This is something that you should be doing from day one. When a client has children, you should position yourself as a resource to the entire family, including those children. Many individuals have the misconception that advisors only manage assets and don’t realize the other values they bring to the table. Making the entire family a part of your practice will only help to grow your business in the long run. Offering financial advice as the next generation ages on items like opening a credit card, paying on student loans to buying their first house is a great way to earn their trust and respect.

The coveted next generation has witnessed firsthand the stress and devastation of 2008 and was likely directly impacted by last year’s pandemic-induced recession. These life events will shape the way these generations save and invest their money, in a much different way than their parents.

Using these strategies to efficiently appeal to and gain the trust of your client’s children will help propel your success as a financial advisor and bridge the gap to the next generation. Our goal is to help advisors grow their businesses and equip them with the strategies and resources they need to be successful. Contact our team to learn how the Merit difference can make a difference in your business.