Getting Your Future Clients in the Door (No Crystal Ball Required)

Feb 28, 2012
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If we could predict the future, I would bet many of us would not be working today (I’m thinking some place tropical, on the beach and lots of umbrella drinks. But that’s me; you can have your own fantasy). Predicting the future can’t be done, but wouldn’t it be nice to know exactly in just what century the Cubs will win the World Series again or what business will be like in the next 10 – 20 years?

While I can’t tell you the future, I can tell you a little about our future clients. Generation X and Y might surprise you (I last wrote about Gen X,Y and Z over the summer). Recently, high net worth individuals between the ages of 18-35 were surveyed about their advisor preferences*. It was found the majority of them, 60%, feel they need very little advice when making major financial decisions.

Now, that number doesn’t exactly sound great- especially when only about 35% of Boomers and Seniors feel this way. So, what does this mean? Are we headed for a rocky path in the future? Will it be harder to get clients?

The way I see it is “No.” Even though these youngsters are the least likely to feel they need advice, they are the most willing to pay for advice. Around 70% will pay!

In other words, if we can get them in the door and show them how we can help, we have a good shot at keeping them there. They do see value in our services and do not have a tight wallet.

Here are a few ways to get them in the door:

1. Start with your Boomer clients’ children. They are most likely within this age group. Start forming the relationship they want by listening and approaching them as individuals and not an extension of their parents. Use technology (including social media); they will expect you to communicate with them the way they communicate with their peers.

2. Be realistic and honest, but reassure them about their financial picture. Many of them have only known the volatile economy that we have today and they need a little perspective. Start with a goals-based approach to investing that segregates the shorter-term and longer-term assets.

3. Map out a financial plan with their custom goals and give them an idea of the services you offer. This age group is known for being collaborators and they like to be involved in their finances. Just go the extra step to pull them into your practice.

4. Create a service plan that fits into their lives. Don’t expect these generations to fit neatly into your quarterly face-to-face service model. Their lives are flexible and changing; you need to accommodate your services model to their schedules. Consider using webinars, FaceTime (or Skype) for meetings.

5. Be transparent. This generation is used to fully understanding the pricing models of what they buy. They expect clear value for their dollars. Make sure they understand how you get paid and why your services are valuable.

Most advisors have books filled with clients who are beginning or are in the draw down stage of their lives. If we don’t replace the assets, the business can’t continue. Focusing on the next generation of clients can allow for business continuity as well as succession.

*Data provided by Phoenix Marketing International. Over 7,000 affluent households were surveyed from August 2010-June 2011 on a wide variety of questions, including investing attitudes and behaviors. High net worth refers to individuals with investable assets between $1-5million.

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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