Every day, I repeat the same truth to my clients: There is
nothing as constant as change.
Change is a constant in any path of life. Sometimes it
creeps in; other times it’s blindsiding. As advisors, we prepare our clients
for this inevitability, but how often are we looking inward to reflect on the
shifting landscape of our industry?
My practice is right in the middle of watching this change
unfold. As a millennial with many millennial clients, I need to grasp what is
important to them as investors. Consistent positive returns aren’t always
enough to keep clients happy. My clients often ask, “What am I invested in?”
before they ask, “How are my investments doing?”
In an industry that is about servicing clients to their
fullest potential, we cannot forget this.
Even as wealth begins to shift from baby boomers and Gen X
to millennials and Gen Z, our responsibilities in managing those assets remain
the same. Personalized financial advice and holistic financial planning are
important at any age. The change at the doorstep—if it’s not already in the
room—comes in the way advisors must execute those goals.
The three most prominent narratives of change I’ve
encountered are technology, environmental, social, and governance investing,
and cryptocurrency. Here is how I’ve molded my practice around these elements:
1. Technology—This is far and away the biggest
difference in generations. Millennials and Gen Z have grown up in a world with
information at their fingertips. They grew up with computers in their back
pockets, purchase what they need online rather than in stores, and use mobile
pay instead of heading to the ATM. These clients demand that we reflect this in
our practice. Older generations got along fine by viewing quarterly statements
and attending semi-annual, in-person meetings. That is no longer the case. The
modern, young client requires a smartphone app to monitor his or her accounts
in an instant. The younger generation expects advisors to provide that
technology and share a fluency in using it. Apps, video conferences and social
media are among the most important channels to appeal to these clients. Long
before they meet you, young clients are likely to view your website and your
LinkedIn page.
2. ESG—In just a few years, environmental, social and
governance investing has gone from an incoming trend to a daily focus.
Millennials and Gen Z are far more concerned with where their money goes versus
how it is performing. The most important lesson here is to stay educated and be
clear with your clients. Know what investments they value and make sure to
discuss clearly what options a client has if they are more concerned with this
aspect of their portfolio. While this change is still in its infancy, it is
crucial to know what is important to each client and how you can achieve their
financial goals while keeping their personal financial values in mind.
3. Cryptocurrency—Is it the wave of the future or a
flash in the pan? While the jury may still be out, cryptocurrency is something
that younger investors are unquestionably curious about. As advisors, we are
limited in the exposure we can have in this asset class, but it is still
important to be able to explain to such clients the risks associated with these
volatile holdings. We do not know exactly where digital currency may be headed
in the world, but it is key to stay informed and to be able to relate to
clients’ questions.
These ultimately are minor changes to the day-to-day manner
with which I handle my practice because, overall, the goal of a financial
advisor has not changed: provide for the financial security of my clients. And,
despite everything, the goals of the client haven’t changed either. Most
clients, regardless of age, ask many of the same questions: How can I get to
retirement comfortably? How should I allocate my assets? How do I lower my tax
burden? What are my insurance needs? These are important questions at age 20 or
age 80. While younger clients may scour the internet for answers before they
reach out, there is no replacement for personal advice from a trusted advisor.
I like to say the two things that are most important to
someone in life are their health and their family—third is their money. While
some younger people may utilize robo advisors or DIY investing, I have found
that when tough decisions need to be made, there is no substitute for having a
seasoned professional on your side. The world has gone digital, but
human-to-human interactions cannot be completely replaced with a computer
program.
That’s why the key to our industry remains relationships.
Building and maintaining bonds with your clients, no matter their age, will
ensure that you have long-time clients—the ones you will guide throughout the
landmark moments of their lives. This will remain vital for every generation of
clients.
We’ve heard it over and over: The world is changing, and we
are in unprecedented times. Yet, a lot of things in the world remain the same.
No matter the age of a client, an advisor must maintain relationships, provide
sound advice and guide them toward their financial goals. That much will never
change.
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