Gen Y and X clients pose financial advice challenge
Most prospective Generation X and Y clients do not know what they want to do financially - and they are a market that requires more industry focus, according to Experience Wealth Advice director and personal wealth adviser Steve Crawford.
Financial advisers need to take a different approach to setting goals with this age group by making what they want most - such as purchasing a property in a particular area within a realistic time frame - into a genuine proposition.
"X and Ys are interested in what they want to do financially but they change their mind or don't stick to a plan over the long term," Crawford said.
"If clients get through 12 months without changing their goals they're slow movers in my world."
Clients in this age demographic will generally examine their financial goals once a year, something Crawford said his strategy focuses on. He said what sets Gen X and Y clients apart from pre- or post-retiree clients is that an adviser must focus their attention on adding value to the financial planning process in terms that this age group understands.
"Engaging them with strategy early on is premature. You need to get them to the starting line first," he said.
"Traditional risk and superannuation planning will be less appealing to them than an approach that offers extra advice on goal setting, spending, and saving and debt advice."
Crawford said that rather than being risk averse, Gen Y in particular, who have seen global share markets rise and fall regularly due to the extensive media coverage, are perhaps more tolerant to risk than previous generations.
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
