Tailoring advice for different generations
Colonial First State (CFS) has shared key strategies for advisers to use for their varying different demographics with a focus on building relationships rather than transactions.
In a webinar, former financial adviser and psychologist Kylie Denton discussed the differing needs of four different client generations spanning Baby Boomers to Generation Z.
Baby Boomers aged 60–70 favour retirement readiness, long-term planning for healthcare and legacy and estate planning. This is followed by Generation X who opt for information on personalised financial plans, support with their work/life balance and value transparency and trust.
Moving onto the younger generations, who are set to benefit from the upcoming intergenerational wealth transfer, Millennials and Generation Z have a greater focus on technology than older clients.
Millennials, aged 28–43, favour advice being technology-integrated, while Generation Z, aged 12–27, seek a digital and mobile-first approach. Both generations are also more focused on investing with a socially responsible mindset than their older peers and prioritise investing ethically and sustainably.
Millennials also desire education and empowerment from their adviser, perhaps reflecting their changing needs as they achieve higher-paying roles or come into an inheritance, and desire financial independence.
Research by Natixis Investment Managers found financial advisers are anxious about retaining clients amid the intergenerational wealth transfer and fearful of generational attrition, highlighting the importance of working with younger generations.
Denton said: “Advisers really need to think about what are the questions I should be asking them, what do I need to think about, what do I need to educate them about, and what benefits do I offer as an adviser or at my company that I can link into what that client values?
“We need to delve deeper and ask those more emotional questions, something magical happens in those conversations, and you see that shift in your relationship with the client.
“When we ask those questions, that’s when we build that level of trust and intimacy with clients and when they are more likely to stay with us as an adviser.”
This conversation should be an ongoing process, with advisers consistently conducting regular check-ins with clients in a way that suits them. This could be remotely for younger generations, for example, or face-to-face in the office for older clients.
Research by the Financial Advice Association Australia and MYMAVINS found clients’ trust in financial advisers is currently at an all-time high, with 94 per cent of advised clients trusting their adviser to act in their best interests.
It also identified trustworthiness as one of the most important attributes of an adviser, alongside expertise and personalised advice considering financial goals.
AUTHOR
Laura Dew
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