Financial Advisors: Don’t Forget The Next Generation

Theresa_Daneman_Socialware.jpgGuest Contributor: Theresa Daneman, Social Business Specialist, Socialware

Every great advisor knows that forming a solid relationship with clients is critical in order to effectively build investment portfolios strategically around personal goals such as saving for retirement, the purchase of a new house, or perhaps, even a vacation home. But all too often, advisors stop their relationship building efforts at the direct client level and fail to get to know their client’s most important asset: their family and in particular, their children.

As most know, we’re in the midst of the greatest transfer of wealth in history from “The Greatest Generation” to baby boomers. However, what’s often overlooked is the total value being transferred pales in comparison to estimated $12 trillion that will be transferred from baby boomers to Gen X/Yers over the next 30 years. Research shows most high-wealth individuals want family members to have a relationship with their financial advisor, however only “4 out of 10 advisors seek to develop relationships with client’s children from the onset,” according to LifeHealthPro. Even more surprising, “less than 14 percent of millionaires indicate their financial advisors have asked to speak or meet with their family,” according to Millionaire Corner.

Bridging the Generational Gap

But where should advisors start when trying to build trust and awareness with a clients’ family? After the initial introduction, social networks are a fantastic and largely untapped opportunity to bridge the gap between generations and begin to foster direct relationships. Given that boomers and Gen X/Yers (the next wave of clients) are the two fastest growing demographics across social networks, major networks like LinkedIn, Facebook and Twitter offer a direct line to extended family without the social awkwardness of attempting to strike up financial conversation by phone with someone who may or may not be receptive to it. By building family connections via social media, advisors also have the opportunity to convey their unique value and expertise before engaging the clients’ family directly, building trust and familiarity while gaining valuable insights about the family as well. For example, an advisor may notice on Facebook that a member of her clients’ extended family in the process of selling a house, starting a new job or sending a child to college. With social networks becoming the most popular form of keeping in touch, these “life events” are commonly the times contacts are most receptive to receiving financial advice or other resources to help with these decisions.

As you know, social networks are about nurturing and adding value to existing relationships. So the next time you log into your Facebook account, pay attention to what your clients post on their news feed. Has your client’s son recently graduated college and started his first job? Perhaps this could be an opportunity to offer to meet and help him decide how to set up a retirement account early or consult on how to maximize contributions to his employer’s 401(k) program. Maybe another client is expecting their first grandchild. This could be an opportunity to reach out to share a congratulatory note and offer to meet with the parents-to-be to discuss college savings account options.

It may be one of the most obvious ways to steadily grow a client base, however it’s clear that most advisors often miss the opportunity to form a strong connection with the next generation of clients, who more often than not, happen to be the children of their existing clients. In most cases, these individuals’ personal wealth is a small fraction of their parents’ net worth; however, many will achieve that level on their own or through inheritance and will likely form an idea about their financial advisement needs before this transfer occurs.

So remember: it’s important to serve as a trusted advisor to your clients – just don’t forget to also invest in those most important to them along the way. And when it comes to interacting with clients and their family members on social media, being authentic and offering informative, relevant content tailored to their unique needs goes a long way. Take care of customers (and their families), provide them value and education, and the revenue will take care of itself.

Socialware will be speaking at FTF’s SMAC New York conference this September 18th on the topic “Apps, Likes, and Tweets: Social Media for Your Firm.” This panel will review the variety of social media platforms being used by financial institutions and what platforms are the next big thing, particularly “SoMo,” or social mobile technology.


Theresa Daneman is a Social Media Specialist for Socialware where she draws from her 15+ years of experience as a licensed financial advisor to help customers successfully use social media to build and maintain their financial practices.

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