As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.
We have considered previously the importance of developing the best proposition and services for different groups of clients and prospects. We now consider the next action identified in the research, which focuses on encouraging younger consumers to engage with Financial Brokers, as this has always been a difficult challenge. However, bringing in younger clients is very important for advice businesses. A balance must be reached between older clients who are currently profitable but may be in or nearing the decumulation phase and having a sufficient number of younger clients who may not be very profitable today but will be in the future.
To attract younger clients, the services you offer will need to be scaled down to make them attractive to younger potential clients and viable for you to deliver. This may mean less frequent reviews, working remotely with clients instead of face-to-face and enabling clients to carry out some tasks themselves using technology. Financial planning and product solutions are needed by and can hugely benefit younger people: it is just that their objectives and goals are different.
It is widely accepted that a Financial Broker’s client base broadly reflects themselves, particularly in terms of age. If you are now in your 50s or later, are you likely to attract younger clients? If you believe this is unlikely, maybe it is timely to bring a young adviser in to your business. A young adviser can probably engage better with a younger audience and if it is early in their career, it is likely that their earnings expectations may be more realistic and affordable for your business.
Social media is not optional if you want to engage a younger generation. For example, Instagram has emerged as a good platform for connecting with younger audiences through mainly educational content. It should be noted that the content required for this platform needs to be very different to that shared with business owners and high net worth individuals on LinkedIn and Twitter. Attempting to engage with younger consumers on Instagram etc. requires carefully developed and bespoke content.
However, a further challenge to be considered is that the wealth in Ireland today is in the older generation – these people have property, good pensions and are wealthy in comparison to other generations. But this wealth will be distributed to children and grandchildren in the coming years. Research has found that more than 70% of heirs are likely to fire or change their adviser after receiving an inheritance. This is a significant challenge for Financial Brokers when they consider their ageing clients dying, and their assets / trail commission being reduced as a result.
Now is the time to develop a proposition to deal with this challenge. This will include engaging with the children of clients through involving them in appropriate advice conversations around their parents’ wealth (with the permission of parents), inviting them to events and engaging them through content marketing. You need to establish your credibility and value in the eyes of the children, long before the assets move to them. The starting point is actually getting to know the children now.