Changing Client Needs Create Opportunities

October 3, 2017


In the not-too-distant past, financial advisors and clients often focused primarily on investments. Advisers focused on managing investment portfolios toward agreed upon client targets and related asset allocation benchmarks.  The relationship was judged primarily on performance, and good results led to satisfied clients.

Today, advisers work in a rapidly evolving marketplace. Clients are looking for more wealth management advice with their investing; financial technology innovation is exploding and increased focus on various fee models are all challenging traditional business models. But many innovative advisers are adapting intelligently and profitably to changing client needs.

A new report finds that “Misalignment between investor values and advisers’ value propositions…will require advisers to think and act differently.”

For savvy advisers who adapt and innovate, changing client needs will expand opportunities.

Transitioning to younger clients

Here are two stats from the study worth pondering: (1) nearly one-half of surveyed advisers’ existing client base consists of baby boomers; and (2) among wealthy individuals under 35, the proportion taking guidance from a bank rather than a private wealth manager rises from one in four to one in three. In other words, as the boomers pass on their wealth, a good portion of the recipients today seem uninterested in seeking advice from a professional financial adviser or wealth manager.

Liz Miller, CFA, president of Summit Place Financial Advisors in Summit, New Jersey, [says] “As [millennials] become more successful, their questions become more complicated, and they are going to hit a wall where they realize the person they’re speaking to may or may not be able to coordinate and direct them to someone that can answer the range of questions that they’re going to have.” They will eventually need the expertise of qualified financial advisors.  “So, it may be that that generation moves into the advisory community a little bit later or just in a different path.” 

This interview with Liz Miller originally appeared CFA Institute Magazine. Click here to read the full article.