Six Ways to Attract Next-Gen Wealth – Episode 28
Advisors looking toward the future are increasingly recognizing that millennials and Gen Z-ers represent potentially enormous growth opportunities.
For starters, there are lots of them—as millennials represent the largest age demographic these days. They’re also inheriting significant wealth. Even better: They report feeling unprepared to deal with that wealth, and are very interested in working with financial advisors who can help them navigate the process.
KEY TAKEAWAYS
- Consider a tiered service model that addresses the needs of millennials and Gen Z-ers.
- Help future inheritors prepare for their wealth through inheritance readiness initiatives.
- Leverage technology to stay engaged with these younger clients.
INSIGHTS INTO ACTION
With that in mind, here are six essential strategies for engaging these next-gen clients and setting yourself up to win their business.
- Implement a tiered model. You may want to develop a tiered service model catering to the specific needs of younger investors, even those with lower wealth levels. This would entail offering a range of services, from basic financial planning to comprehensive wealth management, and leveraging technology to create cost-effective and scalable solutions.
- Create an inheritance readiness program. Develop specific services and systems tailored to inheritors’ unique concerns and needs. These might include educational workshops, personalized financial planning sessions and ongoing support for new inheritors. Expand your expertise in estate planning, tax optimization and philanthropy to address common inheritance issues. And implement a regular review process for inherited wealth preservation strategies, ensuring they evolve with clients’ changing goals and circumstances.
- Consider cryptocurrency. Cryptocurrency is currently an essential component of the investment strategy for 30.4% of Millennials and 17.2% of Gen Z and plays a supplementary role for 25.6% of Millennials and 30% of Gen Z. Only 18.3% of Gen Z and 22% of Millennials are not interested in cryptocurrency. Establish a clear policy on advising about cryptocurrencies and alternative investments. If you opt not to provide this guidance, prepare to explain your stance and consider specialist partnerships to meet this demand while maintaining your focus.
- Ensure comprehensive services. These cohorts want holistic wealth management, not simply help with investing. Expand expertise in estate planning, tax optimization, philanthropy and asset protection for comprehensive wealth preservation.
- Use technology for client engagement. Many of these investors likely had cell phone in their hands at an early age. Technology is an integral part of their daily lives. Invest in technology for streamlined onboarding, account aggregation and real-time portfolio updates. Embrace digital communication channels preferred by younger clients, such as secure messaging platforms and videoconferencing, while ensuring compliance with current regulations.
- Facilitate family engagement. Proactively engage with clients’ families to facilitate intergenerational wealth transfer discussions. One reason: Many younger inheritors seek assistance with family communication challenges. Another reason: Close to half of these inheritors started using the grantors’ financial advisors after receiving the assets. By engaging with families before the transfer of wealth, you position yourself to manage those inherited assets.
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