Utilising her background in psychology as well as her extensive experience in multiple aspects of the advice industry, owner and director of Performance Advisory Group, Kylie Denton, explained that advisers need to dig deeper in their client conversations to ensure they fully understand their wants and needs.
When it comes to working with Baby Boomers, Denton said they generally have a lot of concerns regarding their retirement beyond their finances, but if their adviser is unaware of these concerns, then she suggested that they may not be going deep enough in their conversations.
“They have a lot of retirement stress. They’re worried, do I have enough? When can I retire? What do I want to do in retirement? What identity will I have? Do I have to stay home with my wife every single day? Is my husband going to stay home with me every day? They’re worried about social connections. They’re worried about cognitive decline, right?” Denton said on The ifa Show.
“So, financial planners in that space, if you don’t know some of those questions or if you don’t know some of those things or [aren’t] hearing some of those things in your conversations with your clients, that’s when you know you’ve got to go deeper. So, that’s a bit of a trigger.
“If you’re not hearing some of those concerns or worries or fears from your clients, then that’s an opportunity for you to go deeper with them.”
The sandwich generation
Generation X, or the so-called “sandwich generation”, is now at an age where many find themselves caring for both their parents and children, putting a considerable amount of mental and financial strain on them.
“I’m saying to financial planners, are you hearing those concerns? If you’re not, there’s a real opportunity for you to delve deeper into that,” Denton said.
“Because what we know with these emotional questions is that it helps us to build trust and intimacy with clients, and what I’m talking about when I’m saying intimacy, I’m talking about a level of depth of understanding your clients’ personal values and beliefs, right? So, understanding that.
“We also know that that generation needs and wants and places a very great importance on education. So again, if you’re not hearing how they want to be educated, there’s an opportunity for you to ask questions.”
Emerging and future clients
Finally, Denton explained that Gen Y and Z are both “a generation of anxiety and stress”, meaning that an adviser’s lack of understanding about what they are concerned about is a good indication that they need to expand the conversation.
“We also know in this generation, in both of these generations, they have a strong desire for financial independence, but it’s a little bit different to our Generation X and Baby Boomers.
“Their strong financial independence is more around experiences as opposed to material things like houses or property. So, really making sure that you’re getting that stuff out from your clients. If you’re not hearing some of those things, then that’s when you know you’ve got this opportunity to go deeper around those emotional questions.”
These younger generations also have a strong desire for financial education material, going hand in hand with this drive for financial independence, leading Denton to suggest that advisers looking to capture this emerging client cohort need to consider both their educational output as well as their online presence in order to attract a younger audience.
“We also know that they are being influenced by social media. So, how do we make sure we’re educating them in the way that they need to be educated, the right way?” she said.
“But also in a way that’s actually going to help them to be able to get that financial independence. But also know that you are the best person as a financial adviser to pave that path for them forward.”
To hear more from Kylie Denton, tune in here.
Financial advisers are financial advisers. Not psychologists, life coaches, doctors, travel agents, fashion consultants etc etc etc.
Financial advisers need to stay in their swim lane and not stray into areas outside their expertise and scope of professional service. How clients spend their money and live their lives is up to them. The only thing financial advisers need to do is help them become better off financially.
Hard disagree.
COuldnt disagree more. I’ve got 25 years expereince and we survey clients annually and overwhelming ( >95%) most value the soft skills and intangible benefits above everything else we do. That is what they pay the premium for and where they see the value is. My life guidence is more valued by most of my clienst thant my financial expertise. They expect the latter is a given. The former is why they choose me and happily pay a premium. IN fact, i’d say its our primary ingredient for running a successful firm with almost no client attrrition and an EBIT well above 40%.
You’re saying if you only provide them with financial advice, you couldn’t charge them as much.
I suspect with the money they saved on your fees, they could also separately engage a “life coach”, and still pocket plenty of change.
Charging financial advice fees for life coaching is a scam.