Taking the time to build valuable insights about your clients is a theme I frequently harp on about in my contributions for Professional Planner.
That said, understanding your clients means more than merely having a vague familiarity with their details and knowing whether they have their retirement savings with AustralianSuper or income protection with BT.
Indeed, an authentic business relationship blossoms only once you can appreciate your clients’ buying motivations, their financial challenges and how your services can address these challenges and concerns.
So, how do you apply this marketing theory when the client you desire to work with isn’t interested in engaging with your services?
Research demonstrates the challenge
Just last week, researcher Roy Morgan took a break from political polling and revealed some compelling statistics about who engages with financial planners in Australia.
The critical findings probably won’t surprise many. Roy Morgan’s data shows 46 per cent of the ‘pre-Boomer’ generation (those born before 1946) use financial planners.
At the other end of the age spectrum, just 7.4 per cent of Millennials (1980-1995) engage a financial professional to buy a financial product. Tellingly, Millennials claim to be more reliant on their employers (89.1 per cent) for financial advice. It’s a similar picture for older members of Generation Z (1995-2012), with only 4.1 per cent purchasing from a professional, compared with 91.7 per cent from their employer.
While we know retirees and those about to hang up the work boots remain a core market for financial planners, there are still opportunities to engage with younger generations. In fact, in my capacity as business owner and journalist, I have come across several financial planning firms, who are embracing the opportunities younger generations of investors present.
Starting early
As a member of Generation X (1964-1978), I am abundantly aware that many businesses and marketers continue to overlook us. Wedged between Baby Boomers and Millennials, many members of Gen X joined the workforce as Australia launched into compulsory superannuation.
Gen Xers have now reached an age where we are starting to consider our post-work years, and how we’ll finance a comfortable retirement. As Western nations such as Australia experience dramatic rises in the cost of living from housing, energy, insurance, and grocery bills, financial anxieties are top of mind for Xers.
Therefore, engaging Gen Xers should be a focus now for financial planners. The key is tailoring your offering to our specific needs. For example, how do you convince Gen Xers to save for the future while they are still living for today? This is where engaging with a marketing professional might help.
Millennials
We already touched on the Roy Morgan survey and the revelation that only 7.4 per cent of Millennials engage with financial planners. Most likely, those 25-year-olds working with planners have been driven in your direction by their Boomer parents!
In a similar manner to Gen X, Millennials face a bucket load of financial pressure. Take housing as an example. People in their 20s and 30s, especially those living in Sydney and Melbourne, face the prospect that homeownership is a bridge too far without financial support from the bank of mum and dad.
So, while Millennials may not be working with financial planners now, there’s plenty of evidence to suggest that finance is a significant headache and challenge for them. Maybe some content directed towards Millennials about the benefits of investing in a first home could be a starting point?
The trouble is that Millennials perceive financial planning as a service purely for older people. The smart firms, in my opinion, must challenge this. If you can engage Millennials, the chances are they’ll be clients for life, provided you offer them some value.
