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7 Key Issues for Next-Gen Financial Advisors

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It’s no secret that financial advisors under 30 bring a lot to the table when it comes to wealth management. Everything from their tech-savvy solutions to their ability to connect on a very different level with younger investors make them valuable assets.

But in what specific areas should they use these skills, and where should they focus their attention to speak to what the next generation of investors is looking for? We asked a panel of young, rising star advisors at a recent conference, and here were their insights:

1. Socially Responsible Investing: Investors of all ages are becoming more conscious of the impact they are making socially as well as financially. Investors want to make sure that their investments reflect their values as members of society and as business owners, rather than just the realization of their financial goals. This is becoming such a central objective that even wirehouse firms are beginning to incorporate it into their infrastructures. Advisors who are not in a position to help investors leverage this capability through screening their investments for negative environmental, social or cultural affiliations could be alienating a key segment of investors. Even more proactive practices beyond screening, which include impact investing, shareholder advocacy and community investing should be on advisors’ minds as well.

2. Outcomes & Goals-Based Investing: As advisors move more and more toward a financial planning focus for their clients, more potential and current investors are going to expect this type of care, which gives greater attention to goals-based investing. Investors are increasingly concerned with ensuring their families’ financial security, and less concerned with outperforming the market or achieving higher returns on their investments. The financial planning approach is exceedingly becoming a source of comfort for investors, especially considering the recent volatility of the market.

3. Succession Planning: As aging advisors retire from firms en masse, leaving large amounts of assets behind, the need to focus on succession planning is even more important. Younger advisors are expected to fill the roles of advisors with 30-plus years of experience by catering to the needs of their clients in a fashion that is reminiscent of what they’ve experienced in the past, while fulfilling the needs of a very different future. This requires that the older generation of advisors bring their younger partners into the fold of their vision even earlier on. Learn more about the importance of thinking about succession planning today in our blog: “The Biggest Oversight Financial Advisors are Making for their Futures.

4. Teaming: As the days of focusing solely on investments wane, so do the days of the Lone Ranger running a solopreneur practice. More and more advisors — and therefore investors — are seeing the benefits of partnering and creating a team of advisors made up of members providing a comprehensive array of services for their clients. Building a financial advisory team, like succession planning is something that, at its most successful, is done methodically and over an extended period of time. Our article “Letting Go to Grow” outlines things to consider as you start (or continue) in the process of building a team.

5. Technology: Not surprisingly, this will be a huge focus for advisors who want to pull their younger investor counterparts away from technology-oriented temptations like robo-advisors. The appeal for the younger generation of investors to use a DIY approach via technology exists in finance as it does in any other industry, but the repercussions could be grave. Advisors need to be proactive in communicating this to their contemporaries in danger of being swayed in that direction.

6. Education & Credentialing: As the rumors that becoming a financial advisor will soon require a college degree increase, so does the pressure to achieve successive designations once established in the industry. In addition to the standard designations, such as the CFP, CFA, ChFC and various other insurance designations, advisors are going out of their way to seek out designations within their specialties, such as the CDFA (certified divorce financial analyst), or other designations that are further indications of their general knowledge, such as an AIF (accredited investment fiduciary). As we highlight in the ClientWise Blog “Are you A Journey Learner or Just Hungry for Alphabet Soup?” it’s important to be targeted in how and why you obtain these designations.

Account Aggregation: While this has been a popular method to provide clients with a comprehensive picture of their finances for a while, it’s becoming a differentiator in terms of how it’s delivered. Client experiences can vary from firm to firm or program to program, making a huge impact in how investors interact with their financial pictures. Ultimately, investors’ satisfaction with that experience comes to bear on their relationships with their financial advisors.

— Check out ClientWise’s upcoming Building the Billion Dollar Business seminars.


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