Advisors Missing Opportunities Presented by the ‘New Modern’ Family

Pershing study released at Insite 2013 finds misalignments between what advisors perceive to be their natural client base and the actual affluent population

Slightly more than half of adult Americans are single. Many women are the sole breadwinner in their families. Same-sex marriage is legal in 10 states. By 2042, racial minorities will become the majority of the U.S. population.

These statistics were presented by Kim Dellarocca of Pershing in a news conference on Wednesday at Insite 2013 at which she delivered the findings of an advisor study suggesting that many advisors are failing to take advantage of these changing dynamics of the “new modern” American family.

Specifically, said Dellarocca, to succeed and to differentiate themselves from their competitors, smart advisors need to change their own approaches to affluent women, the children of existing clients, the LGBT community and Americans of varying hyphens (African-American, Asian-American, Hispanic-American, to name just three) and business owners. In addition, Dellarocca mentioned the 23 million American women that she characterized as “PANKs”—Professional Aunts with No Kids—who spend plenty of time and money on their “cherished nieces and nephews.”

Pershing's Kim DellaroccaThe study released Wednesday, the “Investor of the Future,” arose out of an online survey of 317 advisors—from the RIA, wirehouse and independent BD, bank and insurance brokerages—and found that advisors view their client base as primarily Caucasian, married, in their mid-50s and are primarily male. Actually, only 35% of affluent Americans are age 55 and older. While advisors in the survey said women were an important segment of their client base, Dellarocca (left) noted that advisors only gather contact data for 70% of the women in client couples, which does not bode well for retaining those women as clients should their marriage fail or their husband die.

As another example of the misalignment between an advisor’s perceived client base and the actual affluent population and missed opportunities, Dellarocca said that while 83% of the advisors surveyed reported that business owners were an important segment of the client base, only 30% of advisors said they had visited their business-owner clients’ place of business. This signals a significant missed opportunity, she said, since within those businesses there may be many client prospects and opportunities for the advisor to supply needed services to the business. Another example: only a small percentage of advisors report talking with the young adult children of clients about their finances, so when the client parents die or divorce, there isn’t a relationship with their children to build upon.

So who’s doing well serving these growing affluent populations? Women advisors tend to do better, Dellarocca said, perhaps because they’ve been focused on some of those underserved markets—such as women and children of clients—for a longer period of time.

The report is the second in a planned trilogy of reports on the future of advisors and advisor clients from Pershing. The most recent report, available on Pershing’s practice management website, also includes a worksheet for advisors to assess their openness to and ability to serve some of the groups who make up the new modern affluent family.

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