This article first appeared in Professional Adviser.
Five ideas to consider when thinking about a younger client base.
This blog explores how advisers can develop a strategy for attracting younger clients and outlines five top tips.
Having a younger client base isn’t a top priority for every firm. The reasons for this are wide and varied but range from communication barriers and competition from new forms of advice, to a younger cohort that might not seem lucrative on paper.
However, if building a profitable business equipped to stand the test of time is your goal, then having a strategy for attracting younger generations is key.
With defined contribution (DC) pensions becoming the norm and raising the stakes for long-term wealth building, the need for good financial advice among the next generation is clear.
It’s up to us as an industry to find ways to bridge the generational gap and make our services work for younger people throughout the financial life cycle.
Here are five ideas to consider.
- Have a diverse range of advisers
For all the acronyms and technical language, taking financial advice for the first time can be intimidating.
While there should always be multiple contact points with people in your business, being able to match a younger prospect up with an adviser of a similar age can act as a great ice breaker.
It’s natural for people to find others of their generation more relatable, but there’s also a greater chance of common interests the adviser can use to build the close, long-term relationship that’s so important to successful advice.
In a previous column, I explained how firms can go about recruiting younger talent. Take a look if you don’t think your firm is as age-diverse as it could be.
However, good financial advice also comes from experience. Clients knowing that they – or their adviser – can tap into the knowledge of staff members who have got people through periods such as the Great Financial Crisis can act as a great source of comfort on all sides. Don’t be afraid to play on this.
- Be ‘soft’ in your marketing
What strikes me when speaking to end clients is that people seem to care less about investment returns, and more about expert reassurance during uncertain times.
The challenge for many young adults is that they’re so focused on juggling rent and saving for a house deposit, their long-term financial objectives barely get a look in. When marketing to this audience, the key is to focus on the softer questions and subjects that will get people visualising their financial future and the sorts of challenges that could come their way.
Sharing client success stories or personal case studies can be a great way of doing this. By helping prospects envisage their financial ambitions and how others in their situation have attained them, you pave the way for conversations around the role of financial advice in helping them get there.
- Adapt your business model
Most adviser firms’ business models are geared towards clients in the decumulation phase, but it’s important to consider how your service can be tailored to those in the accumulation phase. In reality, quarterly face-to-face meetings aren’t going to add much value to someone who simply needs help learning how to steer the ship long-term.
This starts with having a service for younger clients centred around education. Think workshops covering topics like the power of compound interest and how to decide whether it makes financial sense to pay off your mortgage or invest in an ISA.
To make serving this demographic as cost-effective as possible on both sides, you could also consider having less experienced advisers helping lower-value clients with less-demanding needs, or offering a subscription-based model to cater for those individuals who want to dip in and out when they need help in a specific area.
- Tap into social media
Conventional marketing channels don’t necessarily work for younger prospects. Different demographics and ages require a multi-channel approach. Getting on the platforms that Millennials and Gen Z are using is key. The top social media platforms among Gen Z are Instagram (71%), TikTok (68%), YouTube (68%) and SnapChat 67%, according to research.
I’m not about to suggest posting clips of your team dancing on TikTok, but creating compelling visual content around everyday financial challenges can be a great way of getting in front of younger audiences.
For example, with many young people worried about their earnings in the current environment, one option to consider is sharing a video on TikTok, YouTube, or Instagram, outlining your top three tips for making a salary work harder in today’s economy. To add further credibility, think about overlaying this with a short clip of an existing client explaining how these have helped them in practice.
Elsewhere, ask clients to leave reviews about their experiences on websites such as Trustpilot or Google. Not only will this ensure younger people looking for money support can find you more easily via search engines, but it may also generate valuable content that can be boosted towards your target demographic on social media, helping others understand the benefits of your proposition.
- Think differently when it comes to networking
For all the noise surrounding robo-advice and social media, younger generations still value human connection. This is why, for our advisers, networking continues to be the number one way of connecting with this audience.
Networking doesn’t necessarily have to mean playing golf or standing around at a drinks reception, but rather finding ways to showcase the value of your services in practice. Think of inviting children of existing clients along to meetings for free so they can see what it’s all about or hosting taster sessions for clients of professional connections.
Getting the younger generations engaged with the value of financial advice is not only key to the survival of IFA businesses, but part of advisers’ moral obligation to society.