At the Chartered Institute for Securities and Investment Financial Planning Conference held this week (October 6), four panelists debated whether or not the need to engage the 20 to 40-year-olds was essential to secure their business in the next decade.
Joanna Redmond, director at Investment for Life, said there were several reasons why planners should work with younger clients.
“They know their own minds, they can be career driven, family minded, they might be adventurous [as well], but mostly they are interesting and I enjoy working with them,” she said. “They are keen and like me, they are short on time.
“They need a simple, quick service, and are not even asking me for hours of [my] time. They aren't necessarily looking for your full blown financial planning proposition."
She added: “Once you start speaking to them, these young folks have a fabulous way of having all their information ready for you. They have screenshots in their phones, they have information in their email and they are less likely to be harbouring 20 years of transactions in a box or a drawer.”
Redmond said many young people were already actively engaged in financial matters via platforms such as social media.
“There is something happening out there that financial planners have no control over. Younger clients are looking for answers already, they're asking Google, they're scrolling hundreds of different opinions on online forums.
"The younger generation, potentially your future prospective clients, they're already out there and they are asking their friends for help, so why not do some of those jobs?
“[Give them] someone to trust, somewhere safe to ask the questions and give the wider guidance they need. This will give them valuable prospects for the future and for the future of your business as well.”
However, David Hearne, partner at Financial Planning Partners, was not so sure. He said a financial planner’s time, energy and businesses should focus on its existing clients, concentrated on a niche that it has already identified.
“I now have a very specialised business and I know my client avatar,” he said. "I know who I serve, I know what I do, I specialise in that and my CPD is in that.
“If I'm trying to work with the clients, or children of my clients who are typically the future clients, then my brand or my business or my service will be confused, because it's not anything to them. They will look at my website targeting people retiring.”
Hearne said it was not about turning a blind eye to what was going on in the industry but instead, about outlining the distinction between having a business planning for the next generation, but not necessarily having to win the next generation now.
“It's not to be blind to the fact that there's another generation coming. It's not to ignore facts for future clients who are 50-year-olds but are 30 now. It's just to prepare to win the client now.”
Lockdown trials
Amyr Rocha-Lima, partner at Holland, Hahn & Wills, agreed with Hearne but said targeting a new demographic took time and required a concerted effort.
“We believe there is no way that without on purpose building a business that has different service models to different people, that you’d be able to actually serve different clientele, in the way that's actually doing them justice. All you're doing is pretending you're plugging the advice and actually delivering half a service.
“I can tell you that from experience.”
He explained that during the lockdown, his firm worked with millennials on building a financial plan but it soon discovered this required more work.
He said: “At that point in time, we restructured some workflows with our team to be able to service these people in financial planning, whereas as a retirement planning focused firm, we don’t see these issues every day and therefore we don't have formalised processes to deal with issues from time to time.
"If you don't do it properly, definitely not. What we found is for us to do it properly, we would have to formalise those processes, probably increase our costs and we will have to hire people to help us with that particular service.”
sonia.rach@ft.com
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