Yes, times sure have changed. Many times, younger investors will search for a financial advisor online these days.
When they do find an advisor who will work with them, there is no delegating of the investment management to him or her and walking away. To their credit, it appears that younger investors want to have skin in the game. They want it their way or no way at all.
Communication Uncertainty Still Exists
The media routinely credited Millennials, those born between 1981 and 1996, as the forerunners of the “non-delegation,” collaborative approach. The truth is: high-net-worth investors adopted the custom decades ago.
Sure, they were quieter about it, probably expecting it to become accepted practice as far back as when a single advisor was the family’s financial counselor and confidant to well-heeled families like the Gettys, Rockefellers, Vanderbilts and Rothschilds.
So in that sense, Millennials resemble today’s high-net-worth investors. At the top of both of their lists is communication – frequent, concise and available when they want it and especially when they need it.
This is when wealth advisors must have an ongoing open dialogue and use caution.
Knowing that Millennials and high-net-worth investors believe strongly in connection and collaboration, using social media is preferred on the client’s side. On the advisor’s side, however, the use of social media is regulated.
Transitions and Preferences
At a time of shifting loyalties and wavering allegiances, you might find it surprising that nearly 50 percent of high-net-worth investors say they have maintained their loyalty to one wealth advisor over many years. This was consistent across age groups and wealth levels, according to a recent Wentworth Financial Communications survey.
Make no mistake, these clients do not want to lose their trusted advisors, but they also know he or she will retire someday. They know their primary advisor will make the announcement and introduction well before he or she plans to lock their office door for the last time. And even then, some advisors remain involved and are often available to answer questions.
When the time comes, clients say they will enter the transition process and welcome a younger partner or established advisor to subsequent meetings, reviews and strategy sessions.
At various times, he or she may be the only advisor in the meeting, and clients begin to notice and appreciate a seamless transition and commonality in investment style.
Investors will have formed a likability and confidence for their new wealth advisor, whom their previous wealth advisor felt was the most efficient, compatible, and with whom he or she had the utmost trust and confidence in.
Titles and Other Things Change the Backdrop
Not surprisingly, there is a strong preference for advisor designations and credentials when selecting a private wealth manager, according to the Wentworth survey.
Investors aged 50 and younger with $5 million or more in investable assets felt that designations were “extremely important” to them because experience and expertise mattered.
Investment savvy is what most, if not all, high-net-worth investors and Millennials want when choosing an experienced private wealth manager with proven investing expertise.
In a CFA Institute survey, 30 percent of influential personal referrals were the primary reason for investors who said they sought out the advice of a particular financial advisor because the referral came directly from people they trust.
At the opposite end of the spectrum, failure to set reasonable expectations when assessing the wealth advisor’s performance was the most common reason for switching advisors.
Because it is often difficult to assess personal performance, wealth advisors set reasonable benchmarks and have frequent client communication to best address this concern.
There is No Substitute for Professional Help
There is no substitute for quality either. With so many decisions, and with so much uncertainty these days, our Hefren-Tillotson clients remain grounded and on track to achieving their financial goals by using our MASTERPLAN® approach.
MASTERPLAN® points the way to invest according to your personal goals and values. Hefren-Tillotson believes everyone should have a MASTERPLAN® and, of course, the personal relationship that comes with it.
Which is why we say, “Meticulous Wealth Management is only the beginning.” Our mission is to become and remain your most trusted advisor. Contact us at Hefren-Tillotson today for a fair and honest second opinion. We would be happy to help.