Serving the Investing Needs of Gen X and Y

There have been a few interesting articles recently about advisors serving the next generation of clients. A recent study by Cisco Systems found that wealthy investors under 50 represent an underserved $18.6 billion revenue opportunity for the advisory industry. To me, there are actually several areas of opportunity. 1) the Gen X and Y millionaires and 2) the beneficiaries of current clients (who will be Gen X or Y millionaires) and 3) younger investors who meet the firm’s investing requirements, but not considered high net-worth yet. These are three very different potential clients with some similarities.

For this generation, the tactics of the old days don’t work on this younger crowd and developing trust comes in different forms. These investors use online media and non-traditional forms of communication when dealing with their finances. They want more interaction and access to advisors through social networks, web conferences, tablet and handheld apps as well as other high-tech tools. These generations need to be able to communicate with their advisor through instant messages and digital tools and if they’re not satisfied with that service, they will move their business.

What is not being noted in these articles though, are the differences among these groups. And it’s always about knowing your customers – then addressing their needs. They have different things that they need from their advisor and potentially have different levels of financial acumen.

For a Gen X or Y millionaire, they may be looking at alternative investments to maximize their wealth or interactive tools that allow them to play with various scenarios to maximize their return. For beneficiaries, it may be an area of opportunity to create summaries of their potential portfolio and begin discussions about what to expect. For the non-high net-worth, but active investor, it may be about guarding their income and how to build upon it. In order to best connect with a Gen X or Y investor, you need to know more about them and not just lump them into one overall category. Then, develop a relationship with them over time, in the manners that work for them.

So, what might this mean for your firm:

  • Differentiate your younger prospects – Each have different needs which creates different marketing opportunities. Consider the various types of these prospects and create content and tools that help each one of them without lumping them into one category.
  • Consider your team – Ensure you have talent on your team that can work with these investors the way that they want to be served. This may mean younger or more progressive advisors who are comfortable building relationships using new technologies and informal networks.
  • Develop a digital strategy – Having an online presence is not enough. You need to have digital tools, mobile apps, a mobile-friendly site, online events and an active social networking presence.