Cisco: How to Win Younger Wealthy Clients



A new report from Cisco indicates that wealthy investors under 55 have less trust in advisors and different expectations than older clients, and offers some ideas on how to attract them. A Wall Street Journal article that referred to this study and another highlight the importance of a carefully researched value proposition and service model.

The Cisco study, written up in wealth, is primarily a sales pitch to buy technology for your practice. Big surprise. Nevertheless, it had some very interesting data with significant implications for you as you update your marketing plan. Among the findings:

  •      This is a significant market – Investors under 55 with over $500,000 in investable assets represent 37% of investable assets in the US.
  •      They are the most likely to move – In the survey, 20% of this group indicated they were somewhat or very likely to change advisors within the next 12 months. Older age groups had a far less likelihood of moving. Not only does this mean that you are most at risk for losing your younger clients if you don’t provide them what they want, but another implication is that marketing strategies aimed at older investors are much less likely to be successful at attracting them away from their current advisor. Younger investors represent a risk and an opportunity.
  •      Younger investors have less trust in advisors – among respondents 65 and older, 58% trust advisors more than they trust other investors and only 7% trust fellow investors more than advisors. Among respondents under 55, however, only 32% trust advisors more and 22% trust fellow investors more than advisors. So, referral marketing is even more critical with younger investors and traditional marketing is likely to be less effective.

  •      Expectations are key –clients under 55 report their interactions are not valuable enough with their financial advisor. The study reports that these clients said they want:
    • o   more personalized recommendations and advice
    • o   more discussion of strategies rather than investments
    • o   more frequent interactions
    • o   more information (including charts and graphs) prior to and during meetings

Now, the survey respondents probably did not actually say those things – they probably checked those boxes on a form. It may be that they actually desire more personalized recommendations and more discussion of strategies, but I suspect that this could be a good indication that they place a higher value on financial planning than investment management.

What I feel confident about taking from this survey is that younger clients have different expectations about how they will interact with you. Maybe it is via the high-tech, high def communications channels Cisco wants to sell you, or maybe it is simply somehow utilizing the computer desktop to interact with you and save a trip to the office. Regardless, it is clearly a good idea to have a conversation about whether the come-to-my-office-quarterly model is your client’s preference.

The other study the Journal article referenced is discussed in this article in the current issue of Financial Advisor, exploring the desires of even younger investors, the Millennials, born between 1980 and 2000. Clients in this category, once they have taken care of their basic needs, want to use their investments to change the world. The wealthiest among them may not have superior investment returns as a priority. If they get only adequate returns but advance their social goals, they feel successful.

What I take from these studies, and others like them I have seen, is that exploring your ideal clients’ expectations and incorporating them into your value proposition and client processes offers tremendous opportunity. Building a practice around what your ideal clients want – what they want to accomplish Whether it is saving enough for retirement or changing the world), how they want to get there, how they want to meet with you and how often (which may include Skype, video conferencing, personalized websites, remote interactive planning tools like MoneyGuide Pro, or even simply fewer meetings and more phone calls) – can dramatically increase the likelihood they will tell their friends about you. And, especially for wealthy investors under 55, that word-of-mouth is likely to be the best way to attract them.

1 Comment

  1. PEREZJewelDecember 17, 2012

    Various people in the world take the loans from different banks, just because it's easy.


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