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Investment exec reveals alarming stat about next-generation clients

2 min read

Modern Money

The future of the independent financial services industry was the umbrella topic at the Financial Services Institute’s OneVoice 2014 conference, held this week in Washington, DC. Under that umbrella, just about every pertinent issues in the industry was discussed. At the “Decade of Results” CEO panel, one of the more intriguing issues sprouted: next-generation clients.

The panelists discussed the offspring of the Baby Boomers, their attitudes toward investing and the need for younger advisors. And then one of the panelists, Stephen A. “Tony” Batman, the CEO and co-founder of 1st Global, dropped a bombshell of a statistic. He noted research that found that 90% of the children of Baby Boomers intended to fire their financial advisors once their assets were transferred to them. 90%! That’s not a typo.

“That itself ought to be motivation enough,” Batman said.

Unfortunately, this fire-them-all mindset has taken root at a time when all-too-many people are afflicted by what Batman calls “an epidemic of financial illiteracy.” Many of the afflicted are well-educated, well-off people who just might be set to receive millions in assets from their parents some day.

It is critical that advisors start thinking about generational issues now. They must find a way to reach out to the children of clients in ways that create bonds that can survive the march of time. Firms would be wise to ponder the demographics of their advisor ranks, with an eye on staying in touch with younger folks.

All this off course is a part of the effort to answer an even broader question: “How do we attract the the next generation of entrepreneurs and wealth creators?”

Obviously, the answer is complex and multi-faceted. It will be discussed at many more conferences in the future. For now, when you invite clients for lunch or an outing, you might want to invite their kids as well.