New study highlights the different requirements that older and younger investors have for their perfect financial advisor
The financial services industry is at a pivotal point, with an aging workforce and dual demands from established investors and a younger, digital-native cohort.
Successful financial advisors face a fine balance between providing the kind of traditional service that their older clients demand and the technology-assisted requirements of the next generations.
According to a new report from the Money Management Institute (MMI) and Aon plc, the most successful advisors (managing assets of U$500m+) are embracing tech at higher rates than their peers.
These advisors consider their firms to be digital leaders and are keen evangelists of the digital solutions they offer to clients.
But amid the tech, there is one of the most human qualities that successful advisors also share – values.
“Advisors have been evolving toward more holistic wealth planning by incorporating digital tools to quickly and efficiently address broader financial planning needs. There has been an accelerated rate of adoption in the COVID-19 era,” said Craig Pfeiffer, President and CEO of MMI. “Our research also indicates that investors increasingly want to see their values reflected in their investments; utilizing a firm’s ESG data and tools is an effective way for advisors to spend more time having meaningful client conversations.”
Never too old to learn
The Profile of Today’s Successful Financial Advisors report also reveals that the most effective older advisors (55+ years) stand apart from their peers because they have benefited from best-in-class technology and are accordingly comfortable and confident using it.
More than half of the most successful older advisors agree their firm is an industry leader in this area, compared to 24% of their peers.
While advisors under 45 also agree the importance of technology, they are using tools that help them understand their clients’ values and take a more holistic approach to the financial planning experience.
Younger advisors managing large books are far more likely than their less-successful peers to adopt more advanced goals-based financial planning tools, enabling better conversations.
Background is overemphasized
The research found that advisors believe that working with clients with a similar background - including age, gender, and even values – is more important than it is when trying to form trusted relationships.
While older investors are primarily interested in planning capabilities, younger investors generally place more importance on a wider set of personal values. They want their advisors to be cognizant of their values and how they are reflected in their financial plans.
