A gifted communicator can speak to a child as easily as they can an octogenarian. A talented teacher can convey complex ideas to someone regardless of their age.
Financial advisers need to have both skillsets.
Not only does possessing these abilities help them service existing clients, it opens the door to the next generation whose knowledge, experience and expectations can be markedly different.
Katherine Waller, head of new sales delivery at RBC Wealth Management, told International Adviser that, when it comes to next gen clients, “the first thing you have to do is recognise their level of understanding”.
“You have to remember that some of this isn’t taught at school, and in general there is a lack of access to financial education in society.
“Therefore, what we find with next gen clients is you need to take things back to basics; to talk not only about how to invest and the responsibility of wealth, but also how to manage cash flows, look at your goals, think about debt, tax efficiency and the emotion involved with wealth.
“Then you have to understand who they’ve spoken to before. Unfortunately, if clients have spoken to many different advisers, they may have heard phrases and jargon which they don’t fully understand or might have confused them.
“There’s actually often a re-education process to make sure they have understood the concepts and the importance of understanding their priorities.”
Using next gen advisers
RBC also canvases internal opinion to gauge whether its initiatives have struck the right tone, Annabel Bosman, head of relationship management added.
“When we’re putting together training programmes for next gen clients, we sense check those programmes with the younger members of our team,” she added. “One thing that we’re doing at the moment is looking at how we can run client webinars, starting with the basics around investing – the building blocks of a portfolio.
“And we’re asking our next generation of relationship managers and investment specialists to put this together in ways that the next gen clients will best understand and relate to.
“I’m not suggesting that we’re going to start creating Tiktok videos. But we are thinking about how our message is going to land with somebody who’s in their early 20s or maybe even younger than that.
“I think this is really important because those of us who’ve been in this industry for a long time get set in our ways of doing things, for example always resorting to PowerPoint presentations.
“That quite often just doesn’t resonate with a younger audience. It’s about challenging ourselves to think about it from their perspective.”
Online content
IA recently spoke to Charles Stanley about its newly created central financial services division.
The firm said that it will be looking to use social media to educate clients.
Bosman added: “I think where we end up is a sort of hybrid. We know that for education to be really successful, it can’t just be a push delivery, it needs to be more interactive than that.
“For a whole variety of reasons, interactivity just works better in a live room. For some people, webinars will work really well and for others, it may be better having face-to-face contact with a relationship manager to be able to ask questions.
“Supporting this with social media content feels like the right mix to me.”
DIY investors impact on wealth industry
But, isn’t there a risk that the more investors are educated, the more they will think they can do it on their own?
According to Boring Money, in 2020, DIY investment platforms had year-on-year assets under administration growth of more than £100bn ($141bn, €116bn).
There is now a record £329bn held by DIY investors in the UK and customer numbers have increased by more than 20% YoY to surpass seven million.
Bosman said: “I think wealth managers have agonised over this potential move to robo-advisers. There is still a place for a person at the end of a phone, but you’ve got to have a good online platform.
“The next generation will think seamlessly; they will move from in person to video calls to online, without expecting any friction between those platforms.
“I don’t think all wealth managers are there yet with that. But I think the industry will need to use multiple methods of delivery, and be able to move between them seamlessly.”
Waller added: “There’s a need to be able to do the basics online. But there’s also a need for human interaction. We have a key role to play in helping people close the gap between confidence and competency in managing their monies.”
