Key Takeaways:

• Advisors’ clients are generally on board with advisors’ communication methods.
• Millennials have some distinct preferences involving video, podcasts and other, newer forms of tech-enabled communication.
• Keep an eye on compliance and regulatory rules as they evolve.

FACE THE FACTS

CEG Insights recently surveyed more than 1,500 households—all with more than $100,000 of net worth* and most with a net worth of more than $1 million—about how they prefer to communicate with their advisors, as well as their perceptions of how their advisors are communicating with them.

Overall, the winning technology was email. A full 93.5% of investors want their advisors to email them information. Newsletters came in second place, cited by 39.6% of investors. Meanwhile, videos, podcasts, blogs and social media posts were preferred by fewer than 15% of investors.

When CEG Insights asked those investors the ways in which their advisors were actually communicating with them, the news was good: Overall, clients said the communications they wanted from their advisors are by and large the communications they’re getting. As you’ll see, this alignment has important implications for your business.

A deeper diver, however, highlights that preferred communication methods vary significantly based on these investors’ ages. For example:

• Millennials are much more interested in getting video-based communication from advisors—22.9% versus just 12.3% of investors overall.
• The same percentage of Millennials (22.9%) want podcasts from their advisors, versus just 7.6% of clients overall.
• While emails and newsletters are popular among Millennials, those two methods are less popular with this cohort than they are with Gen-Xers, baby boomers and other groups.
• Telephone calls and in-person meetings are much more likely to be preferred by older generations—boomers and the WWII cohort—than younger investors.

INSIGHTS INTO ACTION

These findings offer clues and lessons for how advisors can best use tech to reach out to clients. For example:

1. Be willing to lead your clients. Overall, as noted, we see strong matches between how clients want to be communicated with and how advisors are delivering their communications. This suggests to us that advisors who introduce different communication methods—who, essentially, lead their clients to new options—are likely to get buy in from those clients. For example, if you increase your video- or podcast-based communication, your clients will probably embrace that decision and take advantage of those outlets given their propensity to accept how you conduct business with them.
2. Adapt your approach based on demographics. Clearly, Millennials have a relatively strong interest in videos, podcasts, blogs and the like. If you want to attract and serve them—and given how much wealth Millennials possess and will possess going forward, you probably should—it makes sense to invest in these newer and emerging communication technologies while minimizing non-preferred methods such as phone calls.
3. Be transparent. Millennial and Gen-X investors have lots of experience with Google and are very adept at doing their own research. Ensure you’re highly transparent regarding your fees, performance and strategies. This will help you build trust and strengthen the client-advisor relationship.

4. Monitor regulatory changes. The wheels of government agencies move slower than technology does. Monitor regulatory changes, and turn to your institution for guidance on using digital channels it can support. It can be smart to be philosophically and strategically ahead with your tech-based communication efforts. But you don’t want implementation to get ahead of what your compliance department wants to do.

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