8 Parameters To Consider While Advising Next Generation

For a long time, the focus of financial advisors have been clients who have been well established in their careers. Slowly, a large part of our segment of clients is seen moving into retirement. On the other hand, the average age of a new investor is also seen as falling. For financial advisors, this is a challenge as they now have to shift their focus to this segment of younger clients.

A lot of young clients are already well within your reach as your old clients near retirement. The younger generation of the families you serve is an ideal place to focus on to begin with. However, as one can easily realise, there is often a generation gap felt between the advisor and the younger generation. As advisors, we may need to revisit our traditional approach in advising and servicing such clients. Here are a few things which we believe would be helpful while dealing with such clients...

1. Develop financial literacy: While the young generation is likely to be way smarter, they need not be much educated in personal finance matters. The source of any knowledge would mostly be friends and internet. Thus, a big role of financial advisors will go into developing financial literacy of such clients. They would need to be given clear understanding and logic behind your opinions. Remember that the client has many sources of getting the right information and one is not dependent on you for same. Hence always present the right version of facts and opinions which can stand the test of evaluation.

2. Be open to questions: Don't ever judge that you have been successful in communicating your ideas simply because there are no questions being asked. Lack of any questions may mean that the concerned person is either not serious about the subject or that you are not been taken seriously. It is important to make the client feel comfortable and welcome to ask any questions, however stupid or difficult they may feel it to be. Likewise, it is also important that you take all questions seriously and with respect and answer them in a proper manner.

3. Start Communicating: As advisors, communication has to be streamlined and made more relevant, interesting and brief for the clients. Communication need not only be regarding transactions and promotions. A lot of communication has to be about educating clients. The mode of communication should suit the young clients who are more more comfortable with smart phones and the communication channels available there.

4. Be Transparent: There is a certain level of transparency expected by client today. Advisors should be open to disclosing all relevant information, processes, etc. that affect the clients. It is also fair that you be open about your qualifications, experience, business setup, etc. to help the client get confidence and clarity about your services. However, not all information is essential for the client, especially the ones which are not relevant/related to your services to him/her.

5. Be respectful: The young generation that we may need to deal with is unlike any generation before us. They are more confident, independent, smart and informed. While they may not be yet successful or experience, they often make up with enthusiasm and dedication. As financial advisors, we need to give appropriate respect to young clients keeping in mind what future possibilities they hold. One way of giving respect would be to sit with the clients and discuss things independently in absence of their parents /guardians. Giving respect is also a great way to get respect from clients.

6. Adopt Technology: The young generation today is literally hands on with technology and would any day prefer something that is backed with automation and technology as opposed to paper or physical driven processes. As financial advisors we would need to have and pitch solutions that are technology driven. In absence of this, the clients are likely to easily get enrolled/acquired by others who are visible on the internet. Financial advisors must also have their presence online with the help of a proper website.

7. Be Patient. Listen.: In spite of doing all the above, it is most likely that the young prospects do not readily follow your advice or even reject them. It is important that you do not have your ego bruised and have patience with the clients. Advisors will need to listen more to the needs, reasonings and problems that the clients have. Listening becomes important when the client is younger, naive and less informed than you. You will need to suppress the urge to give lectures /guidance every now and then and learn to listen.

8. Focus on outcomes: Focusing on outcomes and actions is a good way to work with the young generation. Ask closed ended questions, set clear deadlines and dates for actions /meetings, etc. Be clear and honest on your service standards and what results can one expect from you. At the same time it would be also important for you to underline his/her part in the engagement and your expectations. You should clear the areas of your expertise and services offered. It is always better that you under promise and over-deliver on your services.