How Wealth Management Brands Can Capitalize on Changing Demographics
Only 18% of financial advisors are prospecting Millennials – a huge lost opportunity.
We hear it all the time: the American population is aging. What’s less talked about is the fact that America’s financial advisors are also aging. According to a recent study, the average age of financial advisors is about 50, and 21% are over 60. On the surface, this sounds fine: as baby boomers accumulate assets, their financial interests are served by people in their age cohort.
But the wealth management industry may be missing out on a trend that could profoundly affect its future prosperity: the rise of Millennials. This is one of the fastest growing groups in the country, and unlike baby boomers, whose prime earning years are behind them, Millennials are beginning to accumulate assets – and in some fields, they’re accumulating a lot of assets, and fast. Therefore, no matter what the age of financial advisors, their firm’s brand must speak to younger demographics.
The young entrepreneur whose company just went public. The newly minted law firm partner. The 30-something hedge fund associate already pulling down six – or seven – figures. These should be prime targets for wealth management, and yet just 18% of financial advisors say they are prospecting this demographic, according to recent research. This finding is clearly evident on most wealth management websites, which typically feature photographs of silver-haired couples strolling on the beach or frolicking with their grandchildren. Where are the Millennials? And for that matter, where are non-traditional couples, or single people?
Of course, it’s about much more than images. It’s about messaging that resonates with younger audiences. Yes, they’re interested in accumulating assets for retirement. But study after study reveals that they also want more transparency from their advisors, greater involvement in financial decision making, a sense that their investing, like their work, has a positive impact on society.
The brand challenge for wealth managers is coming up with a single, overarching brand that can resonate with this growing demographic without alienating older investors, who continue to be a major source of AUM. It’s about defining a core value proposition that can engage all audiences, supported by messages tailored to each segment. It’s true of all consumers, but it’s particularly true of Millennials: they don’t buy WHAT you do, they buy WHY you do it. For wealth management firms, finding the WHY will be key attracting Millennials and securing their future.
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