Prepare to Meet the New Generation of Clients

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Many of us who have been in the wealth management profession for a while will admit to fixating on supposed trends. (Remember the furor over robo-advisors replacing human advisors or the looming retirement crisis?) These specters of change failing to manifest – or at least taking longer to do so than originally believed – has desensitized us to the headlines. As a result, we default to downplaying whatever we’re told is coming next.

I am concerned the same is true of another much-hyped conversation surrounding next-generation investors.

While the profession has been endlessly pontificating about how best to attract and serve that next generation, they have already arrived. The descriptor “next” implies that this group of investors has yet to materialize. That isn’t true. Instead, this group of investors – including millennials, people of color, women, first-generation immigrants and other historically underserved communities – have already emerged as the “new generation” that advisors must adapt to serve. They’re here, they have money to invest, and they want help navigating an ever-more-complex financial world. If advisors continue to think of these clients as something that comes “next,” the sense of urgency to adapt their practices and meet the needs of these new investors today vanishes.

Many advisors are woefully behind the curve: According to new research from Fidelity, just one in five has an asset-weighted client age under 60. The average firm derives an overwhelming majority of its revenue from older clients, yet advisors have initiated contact with just 13% of their clients’ children. Meanwhile, despite women’s burgeoning share of the wealth pie, financial professionals are missing out on a $14 billion opportunity to serve them via segment-specific experiences, appropriately tailored enablement programs, and targeted products and services.