5 Strategies Every Financial Advisor Needs to Increase Sales to Gen Y


Share on LinkedIn

Some researchers predict that the combined net worth of Generation X and Generation Y will triple by 2018 to $28 trillion. It’s estimated that Gen Y assets will make up about 20% to 25% of that amount. Furthermore, an additional $18 trillion in generational wealth transfer from Gen Y’s baby boomer parents is projected to occur from 2017 to 2052, according to Deloitte.

But despite the expected increase in Gen Y wealth, many financial advisors lack a strategy for investors of that generation. Failure to develop a game plan is resulting in millions of dollars in lost opportunities today, and potentially billions in missed sales in the coming years. The bottom line is that financial advisors need a Gen Y strategy that puts them in direct contact with this increasingly influential group.

To reach this demographic, financial advisors must build sophisticated customer engagement strategies. The baby boomer–focused strategy of building brand loyalty around the concepts of trust and loyalty needs to be replaced by concepts that resonate with Gen Yers, such as value and community. The infatuation that some advisors have with structuring better and more sophisticated products, such as absolute-return funds and other alternative-oriented strategies, won’t resonate with Gen Y, as they may not yet be able to afford them.

Financial Advisors will also need to rethink their entire sales model in many cases. The model of extracting as many investable assets as possible from a small group of wealthy investors will need to be redesigned to accommodate a larger Gen Y customer base that maintains a lower level of investable assets. The days of narrowing books of business down to a manageable 200 or so top investors are gone.

Next, advisors need to better understand the common traits that define different Gen Y investors. Gen Y is generally considered to include those born between 1982 and 2000, whose numbers are estimated to be as high as 70 million. They make up the fastest-growing segment of today’s workforce.

It should come as no surprise that Gen Y is tech savvy. Many are masters of multitasking and seek stimulation 24/7. E-mail and text messaging are their preferred methods of communicating, and they tend to prefer webinars and online technology to face-to-face meetings and traditional lecture-based presentations.

Advisors also need to understand that Gen Y investors want convenience in their interactions with their advisors and other experts via high-quality video, texting and other social networking tools. Further, they are used to receiving this information for free. Communication strategies that target this group need to take these preferences into account.

Additionally, advisors may want to consider taking a page from the GenYWealth.com playbook. Run by a Gen Y certified financial planner (CFP), the site provides financial tips and other topical information to its Gen Y audience, and currently receives 9,000 unique visitors per month. Not to be left behind, the AARP — yes, that AARP — has created LifeTurner, a blog dedicated to providing financial education to investors from 25 to 34 years of age. Advisors need to create sites and blogs that will provide them with exposure to Gen Y investors.

Finally, there is a sentiment that wealthy investors favor advisors with gray hair or no hair, as they both supposedly connote wisdom and experience. Gen Y doesn’t share that bias. They want to deal with advisors their own age, a fact already recognized by UBS and Morgan Stanley Smith Barney, which have supported efforts to have Gen Y advisors serve Gen Y investors. Financial advisory firms may want to consider aligning their Gen Yers with Gen Yers from their firm, and then have them hold events with this demographic group.

The definition of the advisor-investor relationship is not changing, but the form in which relationships are built is changing. It’s as much about building trust with people that have never met you as it is about the message. The savviest financial advisors are delivering unbiased information on finances, resources and personal commentary via the Internet to a very large market.

Financial advisors must learn to communicate with younger generations of investors via the new media that they access daily or risk getting left in the dust by competitors.

Republished with author's permission from original post.

Bruce Johnston
Over the course of 25 years serving as Chief Executive Officer and President of such firms as Gartmore Global Investments, Sentinel Funds and Old Mutual Investment Partners, D. Bruce Johnston is bringing his sales and marketing expertise to a wide range of companies both inside and outside of his financial industry roots. Named Fund Marketer of the year by Institutional Investor, Bruce has built some of the country's most successful marketing programs and sales teams.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here