Advisers to bridge the generation gap

With $3.5 trillion set to exchange hands over the next 15-20 years, Australian families will need help facilitating a smooth, drama-free transition of wealth from one generation to another.

Money has an uncanny ability to divide even the most loving, cohesive of families, which is why planning early and clear communication between all parties are crucial.

Financial advisers are ideally positioned to oversee the seamless transfer of wealth and, post-transaction, continue providing advice to their clients’ children and grandchildren but they’ll need to gain their trust first.

However, current advice models are based on the needs and preferences of retirees and pre-retirees.


This is problematic because the expectations and needs of Baby Boomers (1946-64) and the Silent Generation (before 1946) are vastly different to subsequent generations.

Some lived through war and the Great Depression so work is about survival. Many spent their entire career inside large organisations following orders and waiting to be tapped on the shoulder for opportunities.

While I’m wary of making broad generalisations because this is the form that stereotypes take, research shows that Baby Boomers and the Silent Generation seek comfort and financial security. They take a more conservative approach to saving and investing.

On the other hand, Generation X (1965-80) is resourceful, independent and entrepreneurial.

Like Baby Boomers they value job security but many will change careers three or four times. They’re less loyal to employers and they also need work/life balance, although not as much as their millennial counterparts.

Millennials (1981-96) are the first digital natives. They rely on technology, embrace change and have an insatiable appetite for information. They don’t just do and believe what they’re told. They have opinions.

As such, Millennials don’t wait to be chosen. They do the choosing. They are prepared to work hard but a good salary and comfortable lifestyle aren’t enough. Their work should be enjoyable and fulfilling and, to achieve an extraordinary lifestyle, they’re prepared to take risks.

A single, generic advice proposition won’t suit all generations, let alone the ones to come.

Advisers need to build trust and rapport with the children and grandchildren of their clients to take them on the advice journey.

They will need a flexible, attractive advice proposition that appeals to all ages and the ability to deliver an excellent client experience.

Increasingly, that hinges on the right tech because tomorrow’s clients won’t judge advisers against other advisers. Instead, they will compare their advice experience to other service providers including retailers, financial institutions and government agencies. They will expect information to be presented in a dynamic, engaging way. That includes video content and interactive tools.

If the advice industry doesn’t get it right, they will lose this $3.5 trillion opportunity to Google, Amazon and other savvy organisations looking to provide advice (read products) to this generation.

A scalable, digital solution that enables a business to touch and service hundreds, if not thousands, of clients is critical but scale alone isn’t enough. For Gen Xers and Millennials who do the choosing, they won’t blindly accept the recommendation of their parents.

They’ll do their own research and consider their alternatives.

Counterintuitively, social media finfluencers aren’t necessarily a threat. Advisers who can work with them to educate the next generation and highlight the value of professional advice will find a powerful ally.

After all, advice businesses will need a strong web and social media presence to effectively compete in the future.

If possible, they need existing clients – especially those with social currency – to leave positive online reviews.

Above all, they need the ability to speak their clients’ language and offer advice at different price points.

That could mean providing advice at break-even or even at a loss in order to retain more lucrative business.

Regardless of a person’s age, everyone can benefit from professional advice.

To capture the biggest opportunity in the industry’s 50-year history, advice businesses must be able to meet the needs of people of all ages so they can secure their position as trusted adviser throughout generations.

Kevin Liao, chief executive, Roar Software

Advisers to bridge the generation gap
Kevin Liao
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