Advisers need to think differently to capture the next generation of clients

Christian Barnes

Christian Barnes

So, what’s to be done? Providers and platforms can alert new and younger investors to the potential pitfalls of self-direction based on peers’ opinions. 

But perhaps advisers are in a stronger position. With more time on their hands, they can work harder to align their offer more with the interests and attitudes of the younger investor.

If they can do that, there will be greater numbers coming into the advice profession with a real sense that they can make a difference, too. With the current generation of advisers retiring (some 60 per cent by 2030), the industry needs to recruit younger professionals whose values reflect those of the younger investor population. 

So, just as institutional investors sought more uncorrelated alternative investments after the 2008 financial crisis, perhaps retail advisers need to familiarise themselves better with the opportunities and challenges of new investment trends today. 

For example, environmental, social and governance factors, crypto, simple online account access and management, and greater transparency for investors over what is in their investments, how much they are paying for what, and so on.

It may be that today’s younger investors are no more interested in the minutiae of why or how their investments perform than their seniors have been.

But we do know that trust must first be established, and what was once the mysterious appeal of the smoke and mirrors of investment will likely be a barrier to that, for new, younger investors and advisers alike.

If all that advisers use the pandemic time dividend for is enhancing their offer to current clients, there may be a much-diminished industry left when they move on.

AML and The Nursery’s Investor Index 2021 research report is available at https://investor-index.com/. 

Christian Barnes is head of strategy at AML Group