Two older adults and a young adult (Credit: Thinkstock)

Imagine if Netflix distributed “Star Wars: The Last Jedi” exclusively in VHS format. Or if Amazon decided to sell only mystery novels, telling patrons who want a copy of “The Handmaid’s Tale” to look elsewhere.

Ludicrous, to be sure. But for millennials (who now officially outnumber baby boomers) and Generation Z, the practices of some financial advisors may seem almost as archaic.

For example, some advisors provide their most valuable resource — their advice and counsel — in a hard-copy format that seems as relevant as video cassettes to many investors, especially those born in or after the late ‘80s. Plus, advisors regularly ask clients to use outside resources to purchase products, such as annuities, because they don’t offer truly unified, data-driven services that cover all elements of finance: planning and budgeting, investing, managing credit and protecting assets.

For generations that grew up with Amazon, the self-imposed restrictions by some financial advisors in serving their clients seem like a curiosity from an older time.

At first glance, advisors face an insurmountable challenge. Their businesses overlap multiple generations ranging from Gen Z to the boomers, each with distinct needs and preferences. And that’s led to an either-or choice. Either maintain an approach that only fits certain clientele well or develop an array of customized options. Fortunately, however, technology now provides the ability to communicate across and within generations.

Here are four ways advisors can design a multigenerational strategy, capture interest on both sides of the gap and, ultimately, drive revenue for their firms:

1. Gain a Holistic View of Your Clients’ Finances

Raised on free money-management apps such as Mint and Personal Capital, many investors love the convenience of using Yodlee-aggregated data that enables advisors to provide a holistic view of their finances. Data aggregation also benefits clients through more personalized advice, enabling advisors to develop actionable insights and build robust relationships with clients to understand and positively impact their goals and financial needs.

The success of this approach is indicated by an Aite study, “Technology Integration Turbocharges Advisor Productivity: Making Time for Clients,” that revealed that RIAs who utilize data aggregation have 78% larger books of business than those who don’t use aggregation; similarly, independent broker-dealers who used data aggregation had 100% larger books of business. In the same vein, RIAs and IBDs using data aggregation had 46% and 73% higher revenues, respectively.

The strength of these numbers indicates the appeal of data-powered service to multiple generations of investors. Investors inevitably benefit from advisors having a seamless and holistic view of accounts and activity to provide more detailed, specific advice based on benchmark data, peer-level performance indicators and other markers.

2. Deliver Unified Advice, Beyond Investing

In a world where consumers expect to find everything in one place, like Amazon, it simply makes sense that financial advisors offer the full spectrum of unified advice solutions, with technology powered by open APIs. This calls for a complete retreat from the old advisor model of  quarterly performance reports delivered via snail mail, and a full embrace of holistic financial planning, which is critical for younger investors. This means working with your clients to define their goals, needs and challenges early on.

The growing popularity of this approach was reinforced by a recent survey by Spectrem, Defining Wealth Management, which highlighted differences in expectations of advisor services and services actually being delivered. While findings showed that expectations around financial planning and investment management were largely met, 83% of clients expected to receive advice regarding loan and credit management while only 3% of clients actually do. Similarly, 82% of clients expected to receive life insurance advice while only 12% do. The market demand for holistic advice is clearly relating to all areas of financial needs, not just planning and investing.

Going forward, technology will increasingly routinize tasks such as rebalancing (eventually even using voice-enabled technology to further streamline the process), while enhancing higher-value functions such as planning, to encourage client interaction.

For example, financial planning software creator Envestnet MoneyGuide released MyBlocks, a digital client engagement tool that advisors can use to cover topics such as paying off credit cards, college loan debt and building an emergency fund. Key financial topics are broken up into highly visual, bite-size blocks to engage prospects and clients of all ages and financial backgrounds.

3. Drive Client Collaboration Through Technology

Part of providing a personalized service is learning how clients prefer to get their information. Providing the option of accessing client information via a client portal on a mobile device has become a necessity, not only for younger generations, but for all clients. Research from eMarketer, U.S. Time Spent With Mobile, published in May 2019, indicates that adults in the U.S. spent an average of 3.6 hours per day using a mobile device in 2018, an increase from 3.3 hours the previous year.

Data from RIAs using the Envestnet Tamarac client portal reveals that 77% of investor clients log into their advisor-branded client portal once a week or more to view their financial information, indicating widespread adoption across all generations.

As advisors prepare to better serve upcoming investor generations, they need to start thinking about alternatives to hard-copy reports and quarterly in-person meetings, and become early adopters of technology like in-app messaging systems, video chats and, coming in a few years, voice-enabled technology. The key for advisors is having the technology in place to do this when it is best suited for the client.

4. Prepare for the Rise of Voice-Enabled Technology

An increasingly important avenue to connect advisors and investors is voice-enabled technology on desktop, mobile and Amazon Alexa-enabled devices. This technology uses artificial intelligence, machine learning, natural language processing and advanced data analytics to enable investors and advisors to conduct routine transactions like opening an account via voice recognition. Clients benefit from the easy, fast and simple process that frees up advisor time to build meaningful relationships and personalize advice.

Today, it’s a mobile-first world. But in the near future, we believe it will be a voice-first world, with voice being the core technology behind as much as 90% of advisor and investor activity, such as rebalancing for advisors. Envestnet is building this functionality into its Tamarac platform, for instance, with plans to introduce it to advisors and investors when security and regulatory issues are resolved.

As a big step, the Securities and Exchange Commission recently proposed amendments to the Investment Advisers Act, addressing outdated RIA marketing and advertising regulations. The rule proposal is intended to reflect changes in technology, the expectations of investors seeking advisory services, and the evolution of industry practices.

The ubiquity of smartphones and other technology has fundamentally changed how people interact with each other and the world around them. Financial advice is no exception.

The end goal is financial wellness for all generations, present and future, which requires establishing a mutually beneficial and seamless relationship between advisors and clients. Fortunately, technology and data provide just that — personalized connections and service without the need for multiple customized offerings. And those connections are only going to strengthen as advancements such as voice assistants and artificial intelligence gain traction. Advisors can leverage flexible technology to bridge the “generation gap” to better serve a wide range of clients, capture increased revenue and stay a step ahead of the competition.


Andina Anderson, EnvestnetAndina Anderson is an executive managing director at Envestnet Tamarac.