Your Opportunity with Generation Next Awaits
By Dave Briggs
Congratulations to financial advisors around the country. You have been invited to participate in the greatest transfer of wealth in history. But the window of opportunity is closing.
Globally, the potential transfer of wealth from baby boomers to their heirs over the next three to four decades will be $30 trillion. In the United States, 3.73 million high-net-worth individuals with over $1 million of investable assets will be transferring over $12.7 trillion to their heirs during this time period. This doesn’t include the additional trillions of dollars the mass affluent will be transferring. A significant and sobering fact is that only 40% of current and potential baby boomer retirees use a financial advisor, and far fewer consider themselves loyal to their advisor.
Make It Happen
When it comes to marketing, there are three types of advisors: those who make it happen, those who let it happen, and those who wonder what happened. As a financial advisor, if your business and marketing goals don’t include a comprehensive plan tuned to the “Great American Wealth Transfer,” then you will be sitting on the sidelines wondering what happened.
Sadly, there are advisors whose marketing plan involves getting to the office early in the morning and waiting for the phone to ring. Those advisors will be left behind. The future belongs to the thoughtful advisors who understand the importance of maintaining meaningful relationships with their clients and their heirs. They will have processes, products, and services in place that will complement the goals and objectives of the giving and receiving end of the wealth transfer cycle.
It goes without saying that your very best clients will be your competitor’s very best prospects. More thought and effort than ever before will need to be dedicated to developing and nurturing personal relationships with clients and prospects. The key multiplier for client retention success will be maintaining meaningful contact with your clients and those who are still prospects. Simply stated, at least 12 to 18 annual contacts will help you succeed; six or less could dramatically impair your business.
From Accumulation to Distribution, Are Your Clients Ready?
Many financial advisors have helped their baby boomer clients through the accumulation phase in anticipation of a comfortable retirement and legacy for their children. Many baby boomers are now experiencing the use and enjoyment phase thanks to a disciplined financial management plan, and have gathered more wealth than they ever thought possible. The next phase will be distribution, passing their assets on to their heirs. For simplicity, let’s refer to the heirs as Generation Next.
Generation Next includes, for the most part, Generation X, and millennials. These heirs include baby boomer children and even grandchildren. They have a very different reality when it comes to cultural issues and agendas. Where their baby boomer parents were largely competitive, optimistic, and idealistic, Generation Next is largely diverse, independent, and skeptical.
The $30 Trillion Transfer Requires Leadership
The $30 trillion question each active financial advisor needs to ask is, “Do I want to provide my financial services for Generation Next?” If the answer is yes, then you need to make sure your relationships are based more on personal merits than performance. Generation Next needs to be considered a stakeholder in the financial planning process. Ignoring Generation Next will only create barriers to you continuing as their advisor.
If you are a financial advisor to baby boomers, you will need to help guide them through this transitional phase. You should consider having at least an annual joint meeting with parents and adult children to discuss planning objectives and accomplishments (within reason). An annual client event can build a sense of community and strengthen loyalty. Monthly newsletters — perhaps printed for the parents and electronic versions for the children — will keep your presence in front of them so you remain top of mind when decision time comes. And it should go without saying that your clients and their heirs will expect you to have a website filled with current, compelling, and credible content that will resonate with them.
Establishing personal and meaningful relationships with all family members will be both fulfilling and rewarding in the months, years, and decades to come.
Dave Briggs is Vice President of Corporate Training for Broadridge Advisor Solutions. Dave has conducted marketing and training events and presented seminars to thousands of financial professionals for over 30 years. His career includes experience as a financial advisor, and he has held senior management positions in the financial services industry. Reach out to Dave at email@example.com.