The ClientWise Blog

"Talkin' 'bout my generation..."

Posted by Chris Holman on Apr 5, 2011 10:26:00 AM


People try to put us d-down (Talkin' 'bout my generation)Just because we g-g-get around (Talkin' 'bout my generation)Things they do look awful c-c-cold (Talkin' 'bout my generation)I hope I die before I get old (Talkin' 'bout my generation)
"My Generation", written by Pete Townshend and performed by The Who, was named the 11th greatest song of all time by Rolling Stone. The song, composed by Townshend at the age of twenty because he was infuriated at the Queen Mother for allegedly having his car towed, was written for rebellious British youths and expressed their feeling that older people "just don't get it".

In a recent study by Cisco Internet Business Solutions Group, "Winning the Battle for the Wealthy Investor", some key findings reveal the same response. However, in this case it's the financial advisors who "just don't get it".

Among the interesting observations of the study was the attention paid to Wealthy Investors Under the Age of 50, a client segment that many financial advisors tend to ignore. Key characteristics of the Wealthy Under-50's demographic include:

  • Hold 28% of the wealth in the US,
  • Have higher incomes than older investors, and more likely to own their own business,
  • 67% expect a substantial windfall/inheritance within the next ten years.

However, the study also reveals a "Generation Gap" when comparing how the Wealthy Under-50's expect to be served by their financial advisor:

  1. Wealthy Under-50's are looking for a "custom fit", including financial services tailored to their specific investment needs, and a range of options for interacting with their financial advisor,
  2. Wealthy Under-50's spend more time managing their investments and want to interact more frequently with their advisors,
  3. Wealthy Under 50's appear to be "restless" with their financial services firms that cannot deliver they type of client interactions that they want, e.g. they desire faster and more convenient options for interacting with their advisors and firms...beyond in-person meetings, phone conversations, and email.

It is this last point, the % of wealth US investors interested in using different technologies, where the Generation Gap is most apparent:

  • 54% of Wealthy Under-50's are interested in webcam conferencing vs. 21% of Wealthy Baby Boomers,
  • 59% of Wealthy Under-50's are interested in screen sharing vs. 32% of Wealthy Baby Boomers,
  • 56% of Wealthy Under-50's are interested in HD video from home/office vs. 24% of Wealthy Baby Boomers.

Switch Advisors?
Indeed, one of the somewhat shocking revelations of the study was that a full 63% of Wealthy Under-50's would seriously consider moving their assets to another firm in order to gain access to these new communication technologies.

We are always a little suspicious of study results that indicate an investor's hypothetical intention to move their assets. (We recall a post-meltdown study in 2008 or so, where 70%+ of investors said they were so hacked-off at their advisor that they planned to switch firms. Never happened!)

Nonetheless, many of the findings of this study ring true concerning the generational difference that exists among the Wealthy Under-50's Investor, especially with regard to technology, and how they expect their financial advisor to connect with them with newer, high-touch, faster, interactive, and more collaborative mediums.

The industry is forewarned.

PS: The study also highlighted another opportunity for financial advisors, i.e. wealthy investors of all ages who have their assets with multiple advisors. In the next day or so, we'll address this too. Stay tuned...

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Topics: Client Engagement, Millennials