Pershing: ‘How to succeed with Generation Why – younger HNW clients’

Financial advisers who wish to attract and retain today’s younger HNW investors need to adjust not only their marketing strategies, but also their business models, according to Pershing, the financial services subsidiary of BNY Mellon.

The role an advisory firm’s business model can play in attracting younger clients was among a number of key findings contained in Gen Why? How to Succeed with Younger, HNW Clients Who Question Everything, a new white paper just published by Pershing, which contains tips and advice for advisers who find that most of their clients are mainly on the older side.

According to Pershing, the paper examines the demographic and psychological factors driving decision-making among what it calls “Gen X, Gen Y and Gen Z clients” – with a focus on investors with US$5m to US$25m in investable assets.

The paper highlights what Pershing calls “important conclusions” that may be drawn about the differences and, more importantly, commonalities, of these investors, “in order to help advisers to devise a strategy for reaching these demographics”.

“Younger generations are poised to earn and inherit significant wealth in the years to come,” explains Katie Swain, ‎director of financial solutions at Pershing.

“For advisers looking to attract and retain young HNW clients, rapid response times, authenticity and complete transparency, along with technology and social media savvy, have all become absolute requirements.”

Gabriel Garcia, managing director of relationship management at Pershing Advisor Solutions, recommends advisers keen to reach younger clients take a look at the business models of retail and technology companies like Amazon, “as well as branding approaches of iconic luxury brands like Ritz-Carlton and Rolex”.

Among the key takeaways in its report, according to Pershing:

• Actively manage time. “Time is a limited resource to be spent wisely; younger investors want to work with advisers who use their time as efficiently as possible. Interactions should be polite but productive and to the point.”

• Meet them where they are (online, mobile). “Advisers will not find many millennials on the golf course”.

• More touchpoints,  but of shorter durations, making use of emails and texts are recommended, while video chats are “preferable to face-to-face meetings”.

• Align your business to a broader mission. What this means, Pershing explains, is that in addition to providing an array of socially responsible investment offerings, “advisers should champion a social cause that’s of real importance to them, and clearly communicate how this commitment ladders back to the core values of their business”.

• Skip the standard pitch, and bear in mind that younger investors want to feel they have the necessary information to make smart, informed financial decisions. “With that in mind, advisers should consider curating podcasts, short videos and objective investment insights to keep clients informed and involved”.

For more information, and to download Gen Why? How to Succeed with Younger, HNW Clients Who Question Everything,  click here. 

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