It’s standard protocol when filling out forms for clients to have them list beneficiaries. For many, a spouse is often first in line, with children being listed as secondary beneficiaries. It begs the question, however:
Do you know your clients’ families?
If not, you may be left in a precarious position in the event your client becomes incapacitated or, worse, passes away. If you haven’t formed a genuine, caring, professional relationship with beneficiaries, any contact to discuss finances during such a time may be viewed as opportunistic, leading younger heirs, in particular, to seriously question whether they should keep “working with their dad’s guy.”
Are You Ready For The Great Wealth Transfer?
The Great Wealth Transfer is looming, stressing the importance of connecting with beneficiaries. Even when that happens, however, advisors may need to evolve to meet the needs of younger investors to maintain their loyalties. With the lure of robo-advisors and myriad of investment firms vying for their attention, there are no guarantees.
Here are three things you can address in your practice to appeal to, and connect with, younger investors who may be weighing their options.
1. Tackle Technology
There’s no denying Gen Xers and Millennials are heavily dependent on social media and may choose to seek the advice of their friends or user groups when it comes to financial guidance. Advisors need to caution them about public opinion when it comes to personal finance decisions and the risks associated with sharing personal financial information on public forums.
You can also tap into their comfort level with technology by promoting your firm’s apps or 24/7 account access. Reputable online tools feature resources to help investors of all ages find credible information and keep their financial information protected. This may go a long way in persuading Gen Xers and Millennials to seriously consider working with you, as they likely want to see practical application of technologies within your practice.
Another way to open the door and show your relevance may be to discuss the importance of conducting a digital asset inventory to ensure all of their online account information — from social media to bill pay to banking information — is secure and accessible only to those who may need it.
2. Communicate Regularly
The distinction between “communicating enough” and “over-communicating” can be a bit of a gray area. Typically, Gen Xers and Millennials prefer that you use technological touchpoints, including email and text, when communicating with them. Don’t rely too heavily on technology to do the heavy lifting, however, as relationship-building is still an important aspect that needs a human touch. Some younger investors may prefer quarterly, relevant interactions with their advisors, be it online, over the phone or in person.
Advisor accessibility may reinforce credibility, especially in uncertain political and economic times. Even more importantly, your clients need to know they can call on you without hesitation in the event of a crisis. When you can respond in caring and tangible ways during times of need, you’ll not only be seen as a professional advisor, but as a personal advocate.
3. Acknowledge Life Events
Unlike Baby Boomers who are entering retirement and likely beginning to plan for transferring wealth, Gen Xers and Millennials are focused on wealth accumulation and are still transitioning through life phases that could impact when and how they achieve their financial goals.
Inheritances, births, adoptions, marriages, divorces and ancillary influences like economic recessions may cause these groups to rethink their savings strategies, in particular how much they would increase the amount of assets they have with an advisor.
Understanding your Gen X and Millennial clients, and where they are on their journeys, can go a long way in solidifying the advisor-client relationship, especially when you’re there to offer advice during key life phases. Social media is often a convenient way to keep up with your clients’ major life events and provides a prime opportunity for you to reach out in meaningful ways.
Many Gen Xers and Millennials want the kind of financial advice that comes from an experienced financial professional, but they want it largely on their terms. By updating some of your business practices to reflect the tools of the times, you can meet them halfway and mutually benefit from the resulting relationships.
Learn more about connecting with these groups using our Building Relationships With the Next Generation infographic. Click the button below to access your copy now.