Can advisors meet the ever-increasing demand for monetary recommendation?


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The financial uncertainty caused by the global pandemic has impacted Americans of all generations and income levels.

Even if the economy shows signs of recovery, too many Americans are still unemployed and uncertainty about how the economy will recover continues. For some, this means concerns about whether a safe retirement is possible. For others, it is worrying that basic financial goals can be achieved, such as: B. Buying a new home or sending a child to college.

And for many younger Americans, it raises questions about the impact the pandemic will have on their lifelong income potential and what that means for their longer-term financial security.

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These concerns lead to an unprecedented interest in financial markets and advice. A growing number of self-directed first-time investors are entering the market in the hopes of using their assets – and their time – on work and getting into the investment world early on.

Meanwhile, the oldest millennials are reaching their 40s and entering an era of critical life choices. After just two recessions, this group of investors is concerned and increasingly turning to professional help to manage their finances.

However, as this new generation of investors begins to seek financial advice, their behaviors and needs could not be more different than previous ones.

To seize this opportunity and turn investor interest into real relationships, advisors need to rethink their business operations, adopt a digital-first mindset, and, perhaps most importantly, be masterful at blending technology with a human touch.

Improve online presence and branding: For a significant majority of younger investors, the search for a financial advisor begins online. In fact, 73% of those under 40 say they rely on a Google search to find an advisor, while 52% say they use LinkedIn. In addition, consumers are increasingly making purchase decisions online without ever speaking to a real person, mostly based solely on online reviews.

An active social and digital presence is considered the basis for reaching these investors. In addition to having a strong online presence, paid strategies like search engine marketing and social media advertising can have a huge impact on reaching and marketing this group.

Millennials don’t want to be just selling services, however.

You want to know what you stand for. In fact, a whopping 83% of Millennials say they are more loyal to a company that helps them contribute to social and environmental issues. To target this group, consultants need to be clear about their brand purpose and values, as well as differentiators. You have to live and breathe these values ​​at every customer contact point – online and offline.

Engage and collaborate: The next generation of investors don’t want to delegate the management of their investments to an advisor and go away – just to check-in quarterly.

They want information to be sent to them on a regular basis. They expect their advisors to communicate with them on social and digital platforms and prefer a more informal style. They want their advisors to support them not only with financial decisions, but also with critical life decisions.

For them, the client-advisor relationship is not just about investment performance, but also about collaboration and experience. And they increasingly want this experience to be unique, personal, and digital at the same time.

Connect technology with a human touch: For a generation of digital natives, the boundaries between the physical and the digital world are becoming increasingly blurred. For them, a digital-first experience delivered through a range of tools – be it digital advice and planning or digital assistants or web chats – that enable their early investment journey is non-negotiable. Equally important is the consultants’ ability to move in and out of the digital world in response to their changing needs, especially as their financial lives become more complex.

The good news is that technologies like data analytics and artificial intelligence are increasingly helping consultants exceed customer needs by recognizing patterns and predicting major life events. This includes a marriage, a home purchase, the birth of a child, etc., which allows for more meaningful and personal conversations at key decision points. Consultants need to take advantage of new technology and make it an organic part of their offering.

Play the long game: Many of these investors are entering the critical phase of asset accumulation at a time when steering important financial decisions was hardly more complex. Consultants who help them navigate this era of complexity will win their trust and loyalty over the long term. However, to play the long game, you need to rethink the old ways of doing business.

It will require a more flexible and innovative approach to fees. In fact, we are seeing the traditional product or asset-under-management-based fee models move towards an experience-based model where speed, convenience, and the right information are available to customers at the right time – all of which are inseparable from the right channel connected to the value of a consultant.

As advisors adapt to these new realities, it is clear that investors of all types are now more concerned about their future financial well-being and are setting new premiums for financial readiness.

It is up to financial advisors to reinvent their thinking and approach to business to help the next generation of investors build better and safer financial futures contracts.

– Posted by Ben Harrison, Head of Advisor Solutions at BNY Mellon’s Pershing

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