Who is the CEO of your business?

Financial Advisory

27 November 2018

AdviceAdvisory DistributorsBehavioursEngagementFinancial Advisory


  1. Client age profiles, volatile equity and low interest rate market conditions and technology, regulatory and fee compression forces could all reduce advisory firms’ revenues in the next few years.
  2. One great source of increasing revenue would-be to engage with new client groups, especially women and beneficiaries of intergenerational wealth.
  3. Millennials offer long term asset growth potential, but they are hard to acquire, and require a different level of engagement and potentially service provision.
  4. Millennials value face to face over robo advice, are unlikely to use their parents’ adviser out of pure loyalty and may have more interest in ESG and private equity type investments opportunities rather than mutual funds.
  5. Women feel less in control (38%) about their financial future than men (51%), are twice as likely to refer their adviser to men and are 26% more philanthropic than men – they see financial advice as male dominated and want a different level of jargon free engagement.

Key Challenges:

  • Rags-to-riches-to rags (or clogs-to-clogs) in three generations is a good reminder to clients of why to involve children in financial planning conversations.
  • The majority of face-to-face advisers are over 50 and have limited natural rapport with millennials
    If a male client dies and you’re trying to keep the wife as a client, there can be a perception issue if all of your advisors are men.
  • There are far too few women in the advisory market in leadership (e.g. woeful representation at Meeting of Minds conference) and face-to-face advisory (as opposed to paraplanner type) roles which does not help attract women into the profession and many female clients would prefer dealing with a female adviser.
  • More risk needs to be taken to hire staff with the right interpersonal skills (empathy, ability to listen, to tell a story) willing to learn the financial technical skills rather than starting off with people from financial backgrounds
    If you ignore millennials because they don’t yet have enough wealth to invest you risk finding they have already got a different adviser by the time they start to be attractive ‘profitable’ clients.
  • Ethnic diversity in the advisory is even worse than gender diversity – the industry needs to wake up to change and work much harder to attract new graduate talent into the industry, to compete with future medics, lawyers or accountants.

Conclusions and solutions:

  • Involve children in the advice process: pair older and younger financial advisers to cover a family, each covering their age bracket within the family.
  • Invite clients to include their children in the meeting to listen in (e.g.by Skype).
  • Bring forward the talk with clients about death. This motivates them to bring their kids into the conversation.
  • Pru model of sitting in the living room and having a tea and talking to the children: if you wait until parents are 65 and kids are 40 to have these conversations, it’s likely to be too late
    To increase women advisors, try hiring from outside the direct industry. Finance can be trained, but empathy and trust-building skills much less so.
  • How important is it to get more female and ‘younger generation’ advisers on board for you as a business owner? You can make it happen if you want to! Don’t pay lip service, be a maverick!
  • When clients’ children are about to head off to uni, one adviser has a chef husband who teaches them how to make a spaghetti bolognaise and she shows how to budget their student finances.

Expert: Brendan McCurdy, Goldman Sachs Asset Management