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Practice Management > Building Your Business

3 Steps to Better Client Relationships

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The Great Wealth Transfer is underway: Over the next 20 years, as much as $68 trillion in wealth will be transferred to younger generations. There are already more than 600,000 millennial (born 1981-1996) millionaires in the U.S. By 2030, just eight years from now, current estimates indicate that millennials will hold five times as much wealth as they do today.

During this period of transition, it’s critical to engage thoughtfully across generations to build successful sales relationships. With this in mind, Chubb recently conducted research to help independent insurance agents and brokers understand the feelings of successful individuals and families about purchasing insurance based on their generation.

We believe our research is highly relevant for financial advisors as well. Generational insights can help you forge new connections and win clients, whether you’re an advisor, wealth manager, agent or broker.

Avoid Stereotyping

First, a word of caution: While the generational research provides insights that are actionable, it’s important to validate any assumptions with your clients to avoid stereotyping them by generation — or any other demographic information.

Chubb’s research shows that there are notable differences between generations when it comes to investigating financial information, responding to risk and working with insurance agents and brokers. Advisors may find that these differences are applicable to their client relationships as well.

Generational insights should be used judiciously — as a tool to open channels of communication and guide conversations, but not as a substitute for deeply understanding someone’s specific goals, needs and concerns.

High-Income Clients

Chubb partnered with generational researchers to better understand the challenges and opportunities of working with successful clients across generations during the Great Wealth Transfer.

Our research included a survey of more than 1,100 individuals with annual incomes of $250,000 or higher and across all adult generations — from the Silent Generation (born 1928-1945) to Generation Z (born 1997-2012).

We found notable but often nuanced differences between generations that can help inform your conversations with clients, prospects and partners, including insurance brokers and agents. Here are a few important differences to be aware of that we are able to discern from survey respondents:

Risk aversion: Younger generations show more risk aversion than older generations and are more concerned about protecting themselves from loss.

Sourcing information: When gathering information on insurance and financial matters, older generations are more likely to turn first to a professional, such as an agent or broker, whereas younger generations are more likely to search online.

Social media use: Compared to older generations, younger generations place greater value on social media reviews of insurance agents. For instance, 73% of millennials vs. 44% of baby boomers (born 1946-1964) read social media reviews of agents before using them. This finding may also apply to financial advisors.

Action Steps for Advisors

Chubb’s research reaffirmed that all generations value being listened to and having their unique needs understood. Here are some recommendations you can take to enhance how you approach and respond to clients of different generations:

Partner with an independent broker or agent: Younger generations experienced the Great Recession and COVID-19 pandemic during their formative years, which may be the source of their increased risk aversion.

You can help address this concern — and incorporate risk management into holistic wealth planning—by bringing an insurance agent or broker into your conversations with clients.

Filter information: With older generations, you can confidently share your expertise and organizational insights. With younger clients, help them understand and filter the information they are accessing online.

Be social, online and offline: High-income individuals value personal connections with agents and brokers — a point that may apply broadly to financial advisors as well. For younger generations especially, it may be helpful to engage through technology. Younger generations often gather financial information from social media platforms, including YouTube, Instagram, Twitter and LinkedIn.

Intergenerational understanding can build trust and nurture client relationships for all sales professionals. Partnering with insurance agents and brokers can also help you respond to different generations’ feelings about managing risk and protecting their wealth.

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Ana Robic is division president, North America Personal Risk Services, Chubb. She can be reached at [email protected]

 (Image: Adobe Stock)