Ahead of the Adviser Innovation Summit in June, My Money Buddy and The Savings Squad podcast founder Adele Martin warned that with older clients passing away, advisers face the daunting prospect of losing revenue unless they can attract their clients’ children.
“I recently spoke to an adviser whose client passed away. The adviser had a longstanding relationship with the client. They lost $50,000 worth of revenue as a result.”
Advisers who cannot offer a millennial service proposition are and will continue struggling to replace older clients, Ms Martin said.
With the 2021 Census of Population and Housing data revealing that millennials (25 to 39 years old) have caught up to Baby Boomers (55 to 74 years old) as the largest generational group in Australia, Ms Martin said the issue has exacerbated.
“The adviser I spoke to didn’t retain any business from his clients’ family because he didn’t have a relationship with the kids. I think advisers are already facing this problem now. If the younger generation has been talking to you and they think all you do is advise on retirement or aged care, they naturally won’t come back to you.”
To address the issue, Ms Martin suggested that the head of an advice practice could recruit another adviser who specialises in servicing the younger demographic.
Second, advisers “have gone astray” by offering budgeting advice, which Ms Martin emphasised is something millennials are not demanding.
Instead, the next generation (particularly those in their 40s) require guidance around paying off their mortgage, travelling with their kids, or being able to work three or four days a week in a workplace that offers flexibility, she explained.
In addition, they may want to invest in bonds for their children to help them purchase property, she said.
“You’ve got to see how you can help them with their spending plans to be able to do that,” Ms Martin said.
“I encourage advisers to use software that can provide projections for the client to see what they can afford. The younger generation wants clarity and to create a life they love. That might not necessarily be about having a whole stack of money for retirement.”
Need for speed
The younger generation also craves speed in the advice process and is not willing to wait for weeks for statements of advice, Ms Martin flagged.
“They’re used to instant stuff. They’re used to binge watching shows in one go,” she said.
“So, make sure you’ve got speed in your financial planning business. Make it very easy to book a consultation on your website using online booking tools. If you don’t have that available anywhere anytime, you’re going to lose those clients.”
Ms Martin said advisers could also assign exercises for clients to complete or send videos and other relevant content (such as financial goal setting or how to negotiate a salary) to keep them engaged until they receive their statement of advice or until the next meeting.
A willingness to communicate with younger clients over text or other messenger services is a must as they prefer this over the phone.
“Millennials will screen calls and very rarely answer the phone,” Ms Martin said.
“You need to communicate how they want to be spoken to.”
At the Adviser Innovation Summit 2023, Adele Martin will provide a generational guide to wealth management, including how advisers could attract the next generation of clients, and how to engage them using social media and creating relevant content on topics that matter to younger clients.
The summit will be held on 8 June at The Great Hall – University of Technology Sydney, and 15 June at Grand Hyatt Melbourne.
Click here to buy tickets and don’t miss out!
For more information, including agenda and speakers, click here.
Haven’t found this to be the case at all. Unprompted, almost all clients have referred or asked if their kids (parents and siblings) could come in or attend. Most advisers I know are struggling with capacity, not leads. Oh that and red tape and regulatory fees
I agree Millenials don’t wish to wait for advice for 2-3 weeks so we give them access to our Financial Knowledge Library and to some targeted reading so they understand a strategy fully while we prepare it in writing and they feel in control and see progess towards their objective.