Advisers must tailor their advice to the different generations.
Financial advisers must tailor their communication strategies to suit the needs of each individual generation.
This is the central finding of Connecting with Clients, a white paper released today by the Association of Financial Advisers (AFA) with the support of Zurich, based on research conducted by the Beddoes Institute.
AFA CEO, Brad Fox said advisers who communicate in line with their client’s preferred communication channels achieve higher client satisfaction levels, have stronger client relationships and have clients who are more likely to refer the adviser’s business to family and friends.
“Our key finding is that not all forms of communication are created equal,” Mr Fox said. “There are different preferences between different generations of clients and there are tangible performance outcomes for advice practices that get the mix right.”
Mr Fox said that as the advice arena moves into the digital age, there is a growing preference for digital forms of communication, particularly in the one-to-many space. “This helps the advice practice keep a more frequent relationship with clients, and we know from the paper that this is one of the keys to client satisfaction.”
Anther important finding is that personal emails are the preferred method of one-on-one communication for all generations. “That said, baby boomers like it less than the younger generations and Gen Y prefer it a little less than Gen X,” Mr Fox said.
All the generations also want to meet with their advisers face-to-face, however while Gen Y prefer catch-ups – for example over coffee – to more formal meetings at the adviser’s office, baby boomers want more formality.
“A baby boomer’s preference for informal catch‐ups, or even for formal meetings in their own home or workplace, is very low compared to other generations,” Mr Fox said.
The Beddoes Institute’s Dr Rebecca Sheils said the results suggest that a ‘more is more’ effect is consistent across ages, with clients in all three generations reporting higher satisfaction with practices that communicate via a larger number of channels.
“All generations want personal email communication to varying degrees but they also want their advisers to connect with them in other ways, including face-to-face,” she said.
Richard Dunkerley, Zurich’s Head of Marketing and co-author of the paper said the findings around social media usage closely mirrored figures previously released by Zurich showing exponential growth in the use of social platforms by advisers.
“The findings also make it clear that there is an increasing preference for people to access content through their mobile device,” he said, “and to the extent that apps help improve the user experience, we expect the development of adviser specific apps to be a massive growth area.”
Connecting with Clients reports on the communication preferences of a total of 530 clients of leading financial advice practices who participated in the Client Experience Survey (the Survey). The Survey is part of The Beddoes Institute’s Leading Practices Program, conducted in August 2013 on behalf of the 10 short‐listed advisers from the 2013 AFA Adviser of the Year Award. A comprehensive list of 20 different communication methods currently used by financial advisers in their businesses was used in the Survey.
To optimize the value from this white paper to financial advisers, we have developed an online resource centre to help advisers put the findings of the white paper into practice. Among other things, it will provide updates, case studies, video interviews and an online course.
