When was the last time you had a digital experience, either while shopping online or navigating through your favorite app or social media platform, that didn’t display content targeted to you, based on your interests?
You probably can’t remember. This is the standard we’ve grown to expect when presented with an enormous pool of options online — content providers offer tools that streamline our search and tailor offerings to the demographics of the user.
Sites that deliver a generic user experience typically don’t see repeat visitors. The same holds true for financial advisors who don’t leverage technology to provide personalized experiences for their clients — especially with younger generations that face a new set of financial challenges and expect digital experiences.
Many advisors recognize they need to adapt to the dynamic needs of different generations to future-proof their business. What can good user experience (UX) design teach us about the steps they should take to attract clients across generations?
The best place to start is to look at the demographics of your users.
Different Client Demographics
As the addressable market grows increasingly diverse, advisors must look for scalable solutions that address multiple variances across levels of wealth, complexity of financial situations, age, gender, and more. The products and services available must be designed to ensure relevancy and confidence to all audiences.
Traditionally, planners focus the client relationship around building and maintaining a holistic financial plan. This doesn’t align with the approach younger generations prefer. Research shows 84% of millennials are actively seeking financial advice, but only 31% of them are working with a financial advisor.
Millennials are looking for episodic recommendations: advice that’s aligned to their next goal. Why? Because for younger people, goals can change drastically over a short period of time, starting with student loan debt and potentially evolving into marriage and families.
They might want to be aware of issues they will have to address for the long-term, but don’t necessarily expect to plan for them upfront.
We’ve observed that younger generations prefer to be self-led. When choosing to work with a financial advisor, they want experiences or technology that enable them to explore on their own.
Younger generations generally don’t like talking to advisors about topics that they don’t know about because it makes them feel uncomfortable. They want to do their own research, so they feel prepared to have a productive conversation.
Technology preferences are another area where there’s a gap across generations. Younger clients are innately more comfortable with digitally generated advice over personal conversations. This is the opposite for older clientele who are not as comfortable with technology.
Their discomfort is bolstered by security concerns with sharing personal data on applications. They’re more likely to trust the advice of a professional from a phone call or in-person meeting.
Older clientele value the expertise of a planner and trust they’ll be able to deliver on complex issues. They’re willing to let the financial advisor take the lead.
Changing Business Models
When it comes to determining the best business model to reach across generations, look beyond a single solution.
A client with more sophisticated needs could stay on a traditional percentage model, but applying that model to a less financially advanced client would not be profitable for the firm. Timelines are also subject to change — millennials and Gen Z could benefit greatly at the foundational stage.
This creates an opportunity to better leverage technology for scalability with an audience who will be willing to put more trust in that model. The trick is balancing the use of that tech to ensure it’s used appropriately for clients who want a hands-off experience, and not used as replacement for clients who prefer a hands-on experience.
Advisors don’t have a way of servicing more traditional clients under their current service model because it takes time and effort to foster relationships with people. Serving the next generation could require less time, but first advisors have to figure out how those clients want to be served.
Yet, understanding how clients want to be served is becoming increasingly complex. It encompasses more than knowing if someone prefers a phone call or email.
Where are your clients in their own journey outside of their financial situation? Career-wise? Personally? These factors likely will dictate what matters to them financially, and good technology will help you capture and optimize this important data and personalize the service you provide.
Why Good UX Matters
Innovations in UX and product design will help advance the delivery of a solution for all of these issues. The ability to capture data and deliver episodic advice in a scalable and efficient manner will evolve the overall advisor/client relationship.
Further, if these tools are available across all devices and accessible to people of all backgrounds and situations, the advisor can consistently meet their clients, no matter how diverse.
Additionally, all UX efforts include a focus on behavioral change. This is a common thread that exists for all client types and demographics. Every type of client needs help developing good financial habits to be successful.
There is a greater impact when engagement tools help users not only calculate and track their progress but also change their habits. For instance, gamification continues to be a popular focus for UX.
Whether it’s physical wellness or financial wellness, good apps help users stay engaged and increase their day-to-day accountability. All of these elements promote behavioral change over time.
Not all clients are the same. Not all expectations are the same.
But the opportunity to leverage advances in technology to understand the expectations of the user experience will allow today’s advisors to be at the forefront of the massive shift in what it means to deliver planning and advice.
Chad Porche is VP and head of UX Design for eMoney Advisor.