Attracting and Retaining Next-Gen Clients – A New Strategy for a New Era
Amid a continually evolving financial landscape, millennials and Gen Z bring new values, goals, and expectations to the forefront of wealth management. Demanding personalized experiences and investments that align with their ethics, these digital natives are poised to reshape the dynamics of the industry as they inherit trillions over the next two decades.
Cerulli Associates projects that $84.4 trillion in wealth will be transferred to younger generations by 2045. Millennials are expected to see $27 trillion of that wealth, while Gen Z is expected to inherit $11 trillion. This great wealth transfer presents an enormous opportunity for advisors. But only if they have a strategy in place to attract and retain next-generation clients.
Cultivate younger, knowledgeable advisors
Millennials and Gen Z want to work with advisors who think more like them and understand their unique needs and perspectives, which is why having knowledgeable younger advisors or experienced advisors willing to expand their perspectives are two of the keys to attracting and retaining the next generation set to inherit this vast amount of wealth.
At Cambridge and other companies in the industry, retaining the next generation of clients – often the children of existing clients – is one of the topics regularly addressed. Cambridge’s approach is to empower our advisors to work with these potential clients by bringing them in early and establishing a relationship even if they are not clients yet. As this next generation of clients is the future of our industry, we want our advisors to know how to work with them. Our New Century Council, comprising advisors under the age of 45, focuses on forward-thinking topics such as new business models, serving next-generation investors and leveraging technology to meet millennials and Gen Z where they are today, and setting them up for where they want to go in the future.
Lean into digital platforms
Millennials and Gen Z grew up in a digital world, often preferring digital experiences over in-person interactions. In fact, millennials and Gen Z want almost 70% of their interactions with brands to be digital, compared to baby boomers at 59%, according to a report from Twilio. In the realm of wealth management, this means they want to manage their finances, access information, and communicate with advisors through digital platforms.
Embracing these platforms allows advisors to reach next-generation clients wherever they are today while enhancing the level of advisor-client engagement – and we’ve learned that increased engagement leads to greater client retention.
Personalize the experience
In today's digital age, consumers, especially millennials and Gen Z, expect personalized experiences. We believe that delivering exceptional service goes beyond technology. It's about building genuine relationships and understanding our clients' unique needs. By combining cutting-edge technology with a personal touch, Cambridge provides tailored solutions that exceed expectations.
Our personalized approach not only builds trust but also fosters long-lasting relationships. By truly understanding our clients' goals and aspirations, we can provide the guidance and support they need to achieve their financial objectives.
Seize the opportunity with women clients
As the Great Wealth Transfer continues, women are poised to inherit a substantial portion of this wealth. Additionally, women are actively building their own financial assets at a remarkable pace.
The good news for women advisors? According to one survey, Ellevest, 65% of Gen Z women – and close to 50% of Millennial women – express a preference for working with them.
While financial advisors of all genders can build strong relationships with clients, women advisors often possess a unique ability to establish rapport and trust with women clients. This advantage can stem from shared experiences, empathy, and a deep understanding of the financial challenges and goals women commonly face.
To capitalize on this significant opportunity, prioritize building relationships with clients of all genders, with a focus on understanding and addressing the unique financial needs of women. By doing so, you can position your practice for long-term success.