Most advisers are keen in landing clients from the emerging affluent or mass-affluent segments, especially as these groups inherit their baby boomer parents’ assets and have a real need for financial advice.
Many young people might initially opt to work with a robo-adviser service rather than a human financial adviser. If leveraged correctly, technology can be a perfect conduit digitally introduce young people to an adviser’s differentiated personal service. Instead of finding ways to fight and resist technology, advisers should choose to adopt fintech solutions as a way to better serve their clients. The picture below shows the preference of millennials when it comes to financial planning. The results are gathered from a study conducted by BetterTradeOff to better understand the various generations and their financial priorities, reasons for financial planning and their tech skills.
Given their penchant for technology, young people are quick to obtain and use financial advice from the Internet. It seems that they would rather watch a video or real a social media post tan sit down with an established financial adviser. Only 12% of millennials are willing to meet with an adviser while 53% indicated that they would very much plan their finances with technology.
Gen X rated themselves between 3 to 4 on a scale of 1 to 5 (5 being the most proficient in technology). Needless to say, Gen Y (millennials) and Z rated themselves between 4 to 5. The interesting takeaway from this analysis is that Gen X has seen the need to adapt and adopt technology as part of their lives. They realise that it is an inevitable change that the world is undergoing, and they are stepping up their tech game to not lose out to the younger generations.
Financial advisers ought to realise that technology is not only for younger clients, and that their older clients may also benefit from technology solutions. Market research studies reveal that we are all part of the information generation – a community of digital citizens living in a global network, always connected with the world’s information at our fingertips. Certainly, there are differences in the digital maturity between clients in different generations and that means there is no one-size-fits-all solution.
The one thing that cannot be denied is that regardless of their age, most people recognise that almost all industries are undergoing an inevitable digital transformation. Tapping on this reality, financial advisers should embrace technology and introduce the benefits of it to their older clients. By engaging a financial adviser with a tech solution, clients get the best of both worlds – the human connection with the adviser and the effectiveness of using a tech solution.