Over the next 20 years, an estimated $70 trillion is expected to change hands from baby boomers to millennials in the largest wealth transfer in history. This shift will undoubtedly reshape the investing landscape and redefine what an average investor looks like.
To get ready for this Great Wealth Transfer, Michael Lane, head of iShares US Wealth Advisory at BlackRock, shares four tips on how financial advisers can prepare themselves to support this new client base.
- Learn from younger advisers and their experiences
Financial advisers who can relate to their clients with shared common experiences are more likely to gain their trust and understanding. Therefore, as millennials slowly but surely emerge as the dominant consumer group, it is critical that financial advisers learn about the interests and aspirations of millennials from those in this age group.
- Master listening skills
Clients are not looking for robots crunching numbers, but instead, empathetic and relatable financial advisers whom they can build trust and a sense of mutual understanding with.
By listening and then rephrasing or repeating what clients have said, financial advisers can accurately understand their clients’ top-priority goals, and thereby successfully determine what they were trying to achieve with their money.
Besides knowing how to listen, financial advisers need to show emotional ownership and responsibility towards their clients’ needs and wants.
Beyond raising assets for clients, financial advisers have a greater purpose of helping clients define the purpose of their money, and then make better portfolio and planning decisions that result in aligning the best financial instruments to achieve their goals.
- Mentor the next generation of advisers
Through mentorship, financial advisers can help build the next generation of financial advisers from early on. Educational programmes will provide valuable hands-on, real-world opportunities to aspiring financial advisers through internships and work-study programmes.
Students and interns gain tangible opportunities to truly understand the core of the business, while mentors benefit from their better understanding of millennials, especially their needs and financial goals.
- Constantly keep up to date with developments and education
The shifting dynamic of our society’s wealth and the growing influence of the millennial generation both provide a huge opportunity and a challenge for the financial services industry. To help their clients achieve a healthy financial future, financial advisers must ensure that they are equipped to properly advise and partner with them.
Financial advisers’ responsibilities start even before the first client meeting. New and experienced advisers alike must build a solid foundation – through constant education, training, and diversification of the field – to prepare for the future of the business.
This is an abridged version of an article that appeared on ThinkAdvisor.