Planners must embrace strategic change: BT

Chris Freeman

BT Financial Group has launched a ‘toolkit’ through its Wrap DeskTop that aims to assist financial planners in targeting “the next generation of wealth clients” — generations X and Y.

The Generation Series is BT’s response to the challenge currently facing financial planners who must close the generation gap in order to grow both client numbers and funds under management as the baby boomer generation enters the drawdown phase.

While this issue has been spoken about widely throughout the industry over the past 10 to 15 years, head of BT Wrap Solutions, Chris Freeman, said “now the rubber is starting to hit the road”.

“This doesn’t mean that the industry is in disarray or that it’s all bad news,” Freeman said.

“It’s not the death knell for financial planners, but a wake-up call. Business won’t be as easy as it has been over the last 10 to 15 years.”

Freeman said it’s time for financial planners to implement strategic change, saying “the whole focus has to shift further down the curve, to the children of baby boomers”.

Freeman said the services planners offer to younger clients will be different to those offered to baby boomers, and will include advice on mortgages, household cash flow and budgeting and margin lending.

As a result, BT is planning to add mortgages and credit cards to its wrap to increase the services available for the asset poor and heavily in debt generations X and Y.

Freeman said the additions to the BT Wrap will enable clients to have “all assets and liabilities on one platform”.

He said this would represent an industry first, but would not commit to a time frame for the introduction of the services.

In response to the issue of the cost of advising the younger, asset-poor generations, Freeman said financial planners servicing these clients would be investing in the future of their own businesses.

Freeman pointed to the use of low cost platforms as one answer, with financial planners creating fee volume by having less contact with more clients.

Financial planning groups including Count, DKN, Lonsdale and Genesys are supporting the Generation Series, Freeman said.

Ironically, Westpac Financial Planning is one of the groups to shun the new strategy, preferring to focus on its more experienced planners, cutting the number of its younger planners in recent months.

Freeman said Westpac Financial Planning preferred to go for the “short-term rather than the long-term strategy” in its push to service the “top end of town”. He said the industry would see which strategy would win in the end, though this could take 10 to 15 years to play out.

In another first, the Financial Planning Association has awarded up to five continuing professional development points for advisers who use the interactive training modules making up the BT Generation Series.

The toolkits are available only to advisers using the BT Wrap.

The online modules contain educational information on the different generational segments, as well as tailored seminar presentations, letters, media releases and template advertisements that BT said advisers can use to “develop a marketing plan, build their business and diversify their client base into these new segments”.

BT said the toolkits also focus on the main client segment of financial planners — baby boomers — assisting planners to “better service the changing needs” of this group.