Last month we talked about how advisors can participate in the great wealth transfer by working with existing clients. The other approach— is to pitch your value as an advisor to the grown-up children.
We are in the foothills of the Great Wealth Transfer—the passing down of some $80 trillion to the millennial and GenZ offspring of the baby boomers. The boomers are already your clients, but how do we go about demonstrating value and securing the business of this soon-to-be-monied generation?
It is certain that this newly flush cohort will need some help in figuring out how to plan for the future, and even retirement. They can’t spend it all on avocados and headphones.
Gen-Zers literally do not answer the phone—closing off our traditional, principal channel. To connect, advisors will need to meet them on their turf. They are ‘digital natives’—they grew up with easy access to financial information and no instinct that they need professional advice.
This means marketing and messaging using digital channels. Advisors should look to develop a presence on video channels, social media, and direct messaging (“DMs”). Having a website is a good start but will prove insufficient to reach generations glued to their phones.
Creating video content is less of a challenge than it might seem. You will be using the same skills you have used throughout your career: communicating, educating, persuading. The mediums have changed but the message essentially stays the same.
Advisors should focus on creating educational content that will help demystify insurance and annuities. Discuss the appeal of policies that adapt over time, allowing for changing circumstances. Showcase the affordability and real-life benefits of a policy. Given that modern annuities take some explaining anyway this should already be second nature to seasoned producers.
In addition to leveraging digital channels to capture business, advisors will need to embrace technology to streamline the annuity application and management process. Offer digital tools and mobile apps (calculators & comparison tools, digital vaults, electronic signatures, etc.) that allow your young clients to track their investments, make changes, and access support online.
More than previous generations, millennials and GenZ are motivated by ethical and environmentally sustainable issues. While such financial products are niche, carriers are beginning to create products with more transparent origins. These might not offer the best returns—or high commissions at this stage—but they are an opportunity to land young clients who may become more open to more lucrative products in time.
The flipside of the Great Wealth Transfer is that millennials and Gen Z are more anxious about money than previous generations. They have faced financial headwinds in access to homeownership, secure employment, and more recently high interest rates. This reinforces the benefit of sound advice with an educational tone. They really do need your help.
Growing up in an age of economic uncertainty has made them more risk averse than previous generations, so the benefits of wealth protection, and risk management resonate with them. As such, annuities can be an attractive investment vehicle (e.g. MYGAs).
Banging the drum for advisors to expand their marketing and communications is nothing new. Your current clients are not going to live forever, and the potential wellspring of referrals will dry up with them.
To take advantage of the generational opportunity on offer it is critical to maximize across all available channels. This will require some time investment and may mean stepping out of a comfort zone, but there is genuinely no downside: introducing visual media and exploiting new platforms will only help your advisory business generally. It will contemporize your brand and future-proof your practice.
Expand your reach, enhance your engagement, and ensure your place in the new financial landscape. The next generation of clients is coming, pockets bulging, and in need of wealth protection strategies. Put your business in the best position to meet the challenge.