Focus on Next Generation Clients: An Inside Look at the July/August Investments & Wealth Monitor

Posted by Admin on Jul 30, 2016 6:00:00 PM

Investment management is in the midst of major secular change. Demographic trends and generational differences are redefining the financial services industry and how we deliver services. Did you know that the average age of a financial advisor today is 50 and increasing? Indeed, fewer than 25 percent of today’s advisors are younger than age 40 and 36 percent of advisors plan to retire within the next 14 years.1 So just as retiring baby boomers are driving up the demand for additional advisors, retiring baby-boomer advisors are creating a shortage—a shortage that is being exaggerated by a dearth of younger advisors entering the business.

This issue of Investments & Wealth Monitor concentrates on understanding, serving, and working with post-boomer generations—in short, updating our practices to incorporate younger clients as well as younger advisors. Start with the basics: Lori Dorsey’s “Why Financial Advisors Should Learn about Generations.” (One reason: Most heirs move their inherited assets to another advisor.) Noel Pacarro Brown provides guidance for working with younger potential clients in “Culture, Communication, and the Next Generation of Investors,” and in “AUM: Are U Millennially Minded?” April Rudin shows us how millennials are poised to transform the financial services industry—just as they have transformed media, job recruiting, and daily life.

Early engagement with client heirs is key, especially for the independent advisor, according to Bernie Clark, author of “Generation Now and the Impending Wealth Transfer.” In “Preparing Your Rising Generation to Sustain Family Wealth,” Dennis Jaffe provides a fresh take on the challenges wealthy families face grooming their heirs. Steven Meyers updates our knowledge about philanthropy and the advisor business model; Gayle Jennings-O’Byrne examines the up-and-coming stewards of philanthropy and how they differ from their parents. Amy du Pon and Darby Hobbs provide insight into how advisors can be mindful of broad social change.

As a secondary focus, we devote some space to upcoming major regulatory developments: first with Julia Binder’s article about the DOL fiduciary rule, then with an article by Anthony Carfang and Cathryn Gregg about new regulations affecting money market funds. We also include the second part of Kendra Kaake’s two-part series on the Canadian retirement system and Mark Harbour’s Spotlight on Ethics, which considers the impact of generational differences in the area of business ethics.

For a first-person account of a topic on the minds of young people now, don’t miss “Student Tuition: Unburdening the Debt for Youth in America,” written by two tenth-graders.

Thanks to the I&WM editorial advisory board and staff for their work on this issue.

By David Koulish, CPWA®, CFP®
Chair, Editorial Advisory Board

1. See Emily Sweet, Cerulli Associates, “Challenges Facing the Next Wave of Retirees,” IMCA Research Quarterly (Q2-2016).

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