A white paper IMCA International published recently suggests that advisors need to concentrate on ‘Generation-Y’, which essentially means people in the age group of 30 to 45 years. According to the white paper, the financial advisory industry is in a significant transition, driven by macro trends such as technology, regulatory changes and competition. One of the significant changes is the generational shift and transfer of wealth.
What makes generation-Y unique
While generation-Y shares many of the financial goals with their parents, this generation’s life experiences have been punctuated by persistent instability. From the dot-com collapse, the great recession, the rise of global terrorism, among other such crises.
Prefers savings: The white paper says that these events have made generation-Y distrustful of financial advice and investing. Therefore, generation-now prefers to save.
Importance to family: Generation-Y is less likely to put career goals ahead of family, says the paper. “Many choose meaningful experiences over flashy consumption. While traditional display of wealth still appeal to some, showy cars and county club memberships take a backseat to substantive experiences with family and friends for many in this group,” it says.
Plans for life after retirement: The definition of successful retirement is broad for these clients. Apart from having a large enough corpus to fund post retirement expenses, these clients prefer building corpus for travelling and emergencies. IFAs should factor in expenses incurred towards these activities while drafting a financial plan for such clients.
What this generation wants from the advisor
Custom relationship: Generation-Y is looking for a custom relationship with an advisor. They expect an advisor, who demonstrates a high degree of transparency, empathy and understanding of the client.
Collaboration is key: These clients prefer a financial advisor with a holistic approach that accounts for a broad spectrum of financial needs and concerns. These investors have a strong research bias and they expect to be involved in decisions about investment strategy, says the white paper.
Round-the-clock access: Generation-Y investors are technologically connected. They want to be in touch with their financial advisor round the clock. They also want to access their financial information anytime.
