Clients at both ends of the wealth spectrum were under the spotlight in the joint Financial Adviser and Russell Investments masterclass, which took place at the Financial Times offices in London on 19 April.
A lot has been said about the need for the adviser industry to better service those with low assets – particularly millennials who have been pigeonholed by vast swathes of the media as being somewhat apathetic about their finances.
The industry takes the view that these individuals have fallen victim to the advice gap – an unintended consequence of red tape designed to bolster transparency and the professionalism of the adviser industry.
An area causing headaches for a number of advisers is how to deal with low net-worth clients while maintaining commercial viability, but Alexander Boni, associate regional director at Russell Investments, said catering for these individuals was likely to prove lucrative for financial advisers in the future.
Speaking to an audience of industry delegates at the event, Mr Boni used the old adage of “mighty oaks from little acorns grow” to illustrate the evolution of these individuals into high net-worth clients.
He said: “Smaller clients tend to have simpler financial planning requirements, so potentially have less of a service burden on you and your staff.
“Make sure they are using their Isa allowance, make sure they are making pension contributions. As they progress in life, their needs become more complex. This is when they need more of your time; but here, their assets are greater and their willingness to pay for advice is greater as well.”
Mr Boni also suggested that adviser firms should develop their communication strategies to target the millennial generation – defined as those born in the 1980s through to the early 2000s – which is highly dependent on technology.
He added that many advisers had become complacent, relying on the income generated by their current pool of clients rather than innovating their offering to attract new business.
This in turn is pushing people toward ‘do-it-yourself’ solutions – making a plethora of mistakes in the process, he claims.
This in turn was pushing people towards do-it-yourself solutions – making a plethora of mistakes in the process, he claimed.
In answering a question from a member of the audience on whether the industry was proactively developing new ways to engage the next generation in the advice process, John Lappin, columnist at Financial Adviser’s sister publication, Investment Adviser, who delivered the first keynote speech at the event, discussed the advent of robo-advisers.
He said: “We should not assume that there is a box we could put them [millennials] in, in terms of behaviour. Do not assume, for example, that they will want to talk to a robot – we will have to ask them.
“I think the industry is thinking long and hard about what to do. Some advisers are saying ‘I’ve got a good business, I’ve got enough referrals coming in, so I don’t really need to worry about that [catering to millenials], so I won’t’, which is fair enough.
