Displaying items by tag: wealth management

Wednesday, 15 November 2023 04:11

How Advisors Can Appeal to Gen Z

Financial advisors can increase their chances of success of landing Generation Z clients by understanding their generational preferences. Many of these younger investors have an intuitive relationship with technology, so they are interested in digital solutions which will give them a more interactive experience. At the same time, they are also accustomed to having instant access to information.

 

Therefore, it’s prudent to have the right tech stack in place to facilitate this in addition to a comprehensive digital marketing and communication strategy. This includes social media, interactive content, and other tools to increase engagement. These can also be effective mediums for advisors to show their personality and knowledge to build a more authentic connection with prospects. A successful and repeatable strategy is to offer a free financial assessment which can be an effective lead-generation tool and more effective for younger investors than a phone call or face-to-face meeting.

 

Many in this generation are also enamored with newer asset classes like cryptocurrencies, so advisors should be able to engage on these topics. In terms of soft skills, advisors should cultivate an air of approachability, relevance, and empathy to increase their appeal.  


Finsum: Gen Z is coming of age and will soon be entering their 30s. Here are some tips on how to appeal to this demographic. 

 

Published in Wealth Management
Wednesday, 15 November 2023 03:11

SEC’s Gensler Comments on AI Proposal

Over the summer, the SEC made a proposal that advisors and brokers would have to address conflicts that emerge through investors interacting with artificial intelligence, an algorithm, or similar technology. At the Securities Industry and Financial Markets Association annual conference, there was some discussion over this proposal with SEC Chair Gary Gensler challenging the audience of financial professionals in his remarks.

 

Essentially, many believe that this is a way to expand Reg BI to make it apply to all sorts of interactions that happen between an advisor and client. SEC Chair Gary Gensler pushed back on this when he remarked, “We’re not trying to change Reg BI or change the fiduciary guidance.” He clarified that instead the SEC is looking to crack down on the use of predictive analytics to ‘micro target’ investors.

 

According to Gensler, there is an inherent conflict between current standards and this new technology if it’s built to help an advisor or broker increase their earnings as it would lead to unsuitable recommendations. He wants to see these algorithms modified so that the advisors’ interests are eliminated or neutralized. However, he didn’t have a strong opinion on how this should be achieved, citing that there are multiple paths to achieving this goal.  


Finsum: The SEC is proposing a new rule for use of AI and predictive data analysis. At a recent conference, SEC Chair Gary Gensler provided some more details about the proposal. 

Published in Wealth Management

One of the keys to unlock growth for your financial planning business is an effective marketing strategy. Marketing is important in every industry but even more so for financial advisors trying to differentiate themselves from the competition. You need to show what makes you unique and qualified to improve your clients financial situation.

 

The right marketing plan will help define your brand, raise your profile, and start generating leads. The first step is to understand your own strengths and weaknesses, identify your ideal client, figure out your unique value proposition, and research the marketing strategies of your competitors. It’s also helpful to think about what mediums or online platforms would be best suited to reach prospects.

 

Next, it’s time to set specific and actionable goals and evaluate whether your marketing plan is working or needs to be tweaked. Some metrics to consider are traffic to your website, social media followers, new clients, and an increase in sales. Once you have set your goals, it’s time to develop a content strategy.

 

There are many possible options, but it’s best to start with one that fits with your personality and that you personally enjoy. Once there is some traction, you can consider other forms of content. 


Finsum: Financial advisors need a solid marketing plan to effectively grow their businesses. Here are some tips on getting started. 

 

Published in Wealth Management
Wednesday, 08 November 2023 16:06

Challenges for Rookie Financial Advisors

New financial advisors face some daunting challenges such as learning the industry, getting their licenses, and building a book of business. Last year, headcount in the industry only grew by 2,579 advisors with a failure rate of more than 72% for rookie advisors. 

 

This highlights the succession crisis that is facing the industry. Over the next decade, it’s estimated that 37% of all advisors, representing 39% of total assets, will be retiring. And among this group, 26% have no succession plan in place. While this is a major challenge for the industry, it’s an opportunity for savvy advisors.

 

For firms, some strategies to improve rookie advisor retention is through a structured training program. Firms will have to invest in developing and retaining their own in-house talent rather than the previous growth model of recruiting advisors from competitors. 

 

Another constraint for firms looking to boost their recruitment efforts is that currently most new advisor recruiting is through word-of-mouth referrals. However, these types of informal methods will certainly overlook many qualified candidates outside of these networks. Therefore, firms must be more proactive in educating young people about this potential career path. 


Finsum: The financial advisor industry is facing a challenge as many senior advisors are nearing retirement, while recruitment of new advisors has been lacking.

 

Published in Wealth Management
Tuesday, 07 November 2023 02:52

Getting Past the Fear of Asking for Referrals

The most effective form of prospecting is asking clients for referrals, yet 88% of financial advisors fail to do so. The simple reason is that most advisors feel too uncomfortable and don’t want to affect their existing relationship with clients. 

 

However, this fear must be overcome if an advisor is serious about growth. According to Brett Van Bortel, the director of consulting services at Invesco Global Consulting, the reluctance is counterintuitive as more than 85% of new business comes from referrals from existing clients. 

 

Van Bortel recommends advisors frame their request as an opportunity for the clients to help their friends and family with high-quality financial advice rather than as a favor for the advisor. The same principle applies to establishing fruitful relationships with centers of influence who often refer high net worth clients with complex issues. 

 

Centers of influence include other professionals like lawyers and CPAs. According to DeVoe & Co., 17% of new clients and 23% of new assets come from these referrals. They are looking for expertise and help in solving a problem. It can often take a long time to develop these relationships and build enough trust, but these efforts can yield steady long-term returns.


Finsum: A key source of growth for financial advisors is client referrals. Yet, many advisors are reluctant to ask their clients for referrals. 

 

Published in Wealth Management
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