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How to capture the attention of younger clients

This article is part of
Guide to retaining intergenerational wealth

How to capture the attention of younger clients
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For businesses that charge based on assets under management, the profit margins associated with millennials – the generation that a client’s children may fall into – could be regarded as relatively low.

But Oliver Bourke, managing director at Mercury Wealth Management, says that seeing clients as individuals without looking up and down the generations is a “blinkered” and short-term approach, which will ultimately lead to diminishing client numbers in a business.

Francesca Smith, private office financial planner at Jarrovian Wealth, likewise says it is very short-sighted to view millennials as low value clients. “It is very likely that in the future, both through career progression and potential capital events such as inheritance, that [millennials] will likely become higher value clients for you.”

While Smith says the value for Jarrovian is with the client rather than their money, she adds: “With the way property prices have exponentially grown in the UK, many of the baby boomer generation have accumulated sizeable assets. This wealth will eventually cascade down and those in receipt will be seeking advice and guidance at this point.

“At Jarrovian, we are very focused on engaging the next generation of our clients’ families. Inevitably the wealth will be passed on, and it is fundamental to the continuation and succession of Jarrovian for us to be able to assist and engage the next generation of our clients.”

When it comes to working with multiple generations, advisers should acknowledge that they will tend to be shaped by different circumstances, says Chris Bishun, investment solutions director at Brooks Macdonald.

“The new age of investors face different challenges when compared to their predecessors. People’s attitudes towards their personal finances have also been shaken by Covid-19, causing a refocus of priorities.

“In 2020 alone, students in England graduating from university incurred an average of £45,000 of student debt. This has created competing saving needs, such as saving for a housing deposit for longer [and] starting pension contributions, while paying down debt.”

Josh Richardson, chartered financial planner at Informed Financial Planning, agrees that different generations will have different motivations. “If you’re not in the same age category, don’t assume a 20-year-old is excited for their retirement at age 65, it’s just too far away.

“Milestones and goals have changed dramatically and it’s not everyone’s goal to get on the property ladder, get married and have two kids and a dog. Don’t try and push your own life experiences or ideals onto this generation, as it may be way off the mark of what they’re looking to achieve.”

Spin-off services

Many advisers are reluctant to work with next generation clients, as they do not have a proposition for them and are concerned about profitability, says Gillian Hepburn, head of UK intermediary solutions at Schroders.

“Our adviser survey indicates that the number of advisers who are prepared to advise clients with less than £50,000 to invest is reducing year-on-year, and is now only 39 per cent,” says Hepburn, who suggests conversations about wills, trusts and power of attorney as one way to begin engaging the next generation.