Content provided by Kostya Etus, CLS Associate Portfolio Manager
Recently, I had the pleasure of seeing our very own Sean Hollingshead present on Autopilot (CLS’s automated onboarding platform) at an advisor event. He discussed embracing new technologies as the target client is beginning to change. The new target client being millennials, or 30-somethings, people like me. I was also at an advisor’s client event recently and realized I was probably the youngest person in the room (a room made sparser by the many clients who hadn’t made it due to health issues). As advisors begin to lose clients, for reasons far worse than performance, they will need to adapt to a new client base, one that has quite a different mindset.
The reason to pursue the younger client is no different from long-term investing. Instead of starting out with a large base and holding it for a short period of time, start out with a smaller base that grows over a longer period of time. People my age have usually taken care of the large purchases, such as a house and car, and have advanced enough in their careers that income is steady. Now, they are starting to think about retirement and their kids’ educations through programs like 529 plans. This makes us prime clients for advisors as we can grow their books over time and most likely increase our contributions as we near retirement. Here are some tips to get young business and keep it.
Use other communication tools besides talking on the phone. I know this is the traditional form of communication between a client and advisor, and it is even more prevalent for advisors to meet their clients in person. But, the new generation has too many things going on, making them more difficult to reach. This always-on-the-go mentality has made time a valuable resource for millennials, and it has to be used wisely. The solution is to use electronic forms of communication that allow millennials to respond quickly and at their convenience. Text messaging and email are two of the most useful tools. Through those electronic forms, let your young clients know you have something to offer if they actually do decide to come see you. And when you do manage to get a client in the door, make it brief. Millenials want to get to the point quickly, so let your client know you appreciate their time and understand how important every minute is.
As a form of continuous communication, consider digital media. A digital newsletter or blog that is pushed out to a client (emailed as opposed to being posted on a website) is usually a good idea. Make sure what you are sending out is direct and truly important. As mentioned, time is valuable, and most Millennial’s’ inboxes are already full. Also, Facebook, Twitter, and LinkedIn can be a way to get new clients’ attention and create buzz around your name. Also, if you really want your newsletters to be read and your message to be heard, digital media may be your best chance. Lastly, make sure you have a well-built website. When a Millennial needs to evaluate or compare products, they Google it. When your company (or personal) name is Googled, you want to make sure a quality product comes out on the other end.
Lastly, don’t terrify clients with the worst possible outcomes. Give your clients a list of options and encourage them to research on their own. We like doing our own research and independently confirming that we are making the right decisions. Access to high-quality information is limitless these days, and this has created a skeptical, and well-informed, consumer. The advisor of tomorrow needs to understand that he or she may need to answer a lot more questions and provide more in-depth explanations of their choices.
I hope you find this useful. Good luck!