Blog: The Millennial Opportunity

Meet Wendy and Andrew

Millennials are expected to be the largest adult segment by the end of the decade. You may remember Wendy and Andrew as the avocado loving, up-and-coming Wealth Accumulators from our client persona infographic. They represent a new breed of clientele that is driving industry change and redefining the way financial advice is delivered.

 

The opportunity

Born between 1980-2000, there are 4.9 million millennials in Australia. While they may not have the assets their parents did at their age, there’s a massive wealth shift underway: not only are millennials approaching the peak of their earning potential, they are set to receive the largest intergenerational wealth transfer in history.

Millennials have grown up in a digital world rocked by the GFC and most recently seen the revelations brought about by the Royal Commission – a climate that hasn’t been conducive for building trust in financial services. According to a recent report by Deloitte, they are relatively risk-averse and like to be in control when it comes to financial matters. In fact, 72% of millennials describe themselves as self-directed with direct control over their wealth. But despite the scepticism, 84% of millennials seek some sort of financial advice, clearly indicating a need for financial guidance amongst this cohort.

What they want

Millennials are not looking for their parent’s adviser – or traditional advice for that matter. From buying a house to preparing for children, millennials want to see the tangible value of advice. They are by and large, a self-sufficient generation who prioritise convenience and want 24/7 access to their financial information.

In fact, they see tech tools as a basic requirement, rather than “a-nice-to-have”. According to an Accenture study in 2017, 67% of millennials want software that enables tracking of transactions, payments and other financial data in real-time to provide better recommendations. 63% want a mobile platform that connects directly to advisers – they see technology as paramount to the client experience but not a substitute for human advice.

At a time where trust issues loom, it’s no surprise that millennials want real relationships – something which technology can’t deliver on its own. Delivering an authentic customer experience and leveraging technology to strengthen relationships is key to demonstrating value to this generation. A sense of humour also gets the millennial tick of approval, with 69% of millennials saying they want their financial adviser to possess humour.

 

How to help them overcome their challenges

Empowerment begins with education. Millennials seek out digital content that addresses their unique financial challenges and goals. From e-books, websites and podcasts, millennials trust content from authentic brands that understand their needs and speak their language.

Unlike previous generations which tended to be more trusting of established brands, Millennials are far more likely to be influenced by word-of-mouth referrals. Social media can be used to create a unique digital brand, as well as provide a platform to share relevant content and highlight peer recommendations allowing advisers and accountants to build trust with millennials. The visibility gained through social channels is powerful regardless of whether they take you up on your services – even if they are not ready to engage today, they’ll know where to go when they find themselves in need of professional advice in the not-so-distant future.

A product of their environment, millennials are very goal-oriented. Whether it is taking out a significant loan to buy a house or seeking advice to pay off debt, managing income is a top priority. From providing clarity on big life decisions by visually tracking goals, to managing cashflow with automatic tagging, there are tools at your disposal (including myprosperity!) you can use to provide millennials with the kind of digital financial experience they expect.

Now you have a better understanding on how to embrace the millennial opportunity, stay tuned for our next persona deep dive on Peter the Property Mogul!

Are you an adviser looking for tools to engage millennials? 

Check out the video below to see how advisers are leveraging myprosperity to engage the next generation of clients.

3 strategies to attract (and win-over) pre-retiree clients

Meet Nearly Retired Nancy

Nancy is planning to retire in the next  5-7 years. With fewer family commitments (her 2 kids are just entering the workforce), she is an empty-nester who has new-found time to pursue her hobbies. As retirement is around the corner, she’s focused on paying down debt, protecting her wealth and achieving her retirement goals. So what makes Nancy tick and how can finance professionals engage with her?

 

The opportunity

Pre-retirees (defined as age 45 and up, but not yet retired) are estimated to number 4.9 million – representing a large portion of Australia’s ageing population. According to AustralianSuper’s Retirement Confidence report, pre-retirees expect to retire at a much older age than those already retired (about 10 years), relying more on their superannuation than on the Government Aged Pension as their main source of retirement income.

As will all other personas though, pre-retirees are not a completely unified group. According to a 2017 study by Australian Unity, 36% believe they will be in a comfortable financial position when they retire, but almost as many (29%) believe they won’t.

 

 

What they want

Not all pre-retirees are ready to retire, but many want to know when they will be able to switch gears. Professional advice is especially relevant to this group, that often need guidance to navigate financial complexities.  

In particular, they’re often looking for help on how to leave a strong financial legacy to their children and grandchildren, navigate tax requirements to ensure a comfortable retirement, and reduce risk so as to support their current lifestyle well into their golden years.

 

How to help them:

 

1. Don’t underestimate their digital literacy

A common misconception regarding the pre-retiree or Baby Boomer generation is that they don’t engage with technology. But the truth is generational interests are changing almost as fast as technology itself. AirBnB is a great example – launched in 2008, the platform’s fastest growing segment is now senior women over 60. In today’s world where consumers can order their favourite takeaway food to their doorstep with a few swipes on their mobile, people of all ages are expecting the same level of customer experience from financial service providers.

While some argue that technology reduces the intimacy between the client and adviser, when used the right way, technology can help you foster trust and strengthen client relationships. Pre-retirees often have a surplus of wealth and more complex planning needs, making clarity and timely advice paramount. Technology such as myprosperity, equips you with the tools to bring your client’s entire net worth into one place. Whether it’s helping clients get an up-to-date will or organising their estate planning wishes with the Executor Kit, the wealth portal helps you cement your place in your relationships with clients.

 

2. Emphasise authenticity

Many people hold the perception that clients engage advisers to accumulate money. But for many older Australians preparing to transition into retirement, their focus has gone from wealth accumulation to preservation. In fact, according to AustralianSuper’s Report, 38% are anxious about retiring, and only a quarter of respondents believe they have enough money saved to comfortably retire.

Tapping into these concerns, and positioning your brand as a trusted, authentic service that can help alleviate them, is key to engaging pre-retiree clients. A company’s website is often where prospective customers form their first impressions, so it’s important your brand strikes a chord. Frame your services with language that’s focused on your clients – their dreams & concerns – and focus on the key points you know are of interest to them, rather than providing a laundry list of everything your firm has to offer. Then, do away with cliche stock photos of the retired couple walking on the beach; instead, use real photos of your staff and clients to emphasise the human side of your firm. After all, prospective clients come to your site looking for ways to achieve their financial and lifestyle goals – not grey haired people wearing linen.

 

3. Make the complex simple

Finance professionals often overestimate their clients’ financial literacy: according to an Accenture study,advisers felt only 1% of their clients were “not knowledgeable” about investments, yet 25% of clients identified themselves this way. A client may have accrued vast amounts of wealth trading commodities, but that doesn’t necessarily translate to knowledge of how to manage that wealth.

Attract new clients by offering content – whether webinars, blog posts or e-books – showcasing your expertise and educating consumers on key concepts of financial literacy. For existing clients, leverage reporting platforms, cash flow management tools, and client portals to streamline how you deliver services. Technology should enhance the customer experience – not complicate it. Giving your clients a platform they can use as their single point of entry to access their entire financial world, we think, is a good place to start.

 

6 Most Common Client Personas

 

What’s the number one, most powerful thing you can do now to make 2019 a success?

Organise your clients into groups of people with similar needs so you can tailor your messaging, plan your marketing, and ultimately prepare your business for success.

 

About Customer Personas

In marketing speak, customer personas are ideal representations of clients. By definition, they are quite generic and stereotypical, however they are critical to understanding how you can best communicate and serve customers at scale.

Most businesses will have anywhere from 5 to 20+ personas, but the most successful businesses are those that have identified a narrow set of 3 or 4, and focused their efforts on servicing them as best they can.

This narrow focus allows their marketing and communications to be more relevant, and thus more effective, in differentiating their services and attracting customers.

 

Personas in Financial Services

Below is a breakdown of the 5 most common (and broad) client personas seen in financial services. Where do your customers fit?

Tips for tapping into the Gen Z market

Generation Z graduates are beginning to launch their careers, adopt substantial university debt, and take on new territory and financial challenges.

Just the anticipation of their coming-to-age could reshape the financial landscape over the coming years, combining with Millennials to reform the industry. 

With Millennials and Gen Z now constituting more than 40 percent of Australia’s working population, they are no longer considered ‘the future’.

But do they want the help of a financial adviser? Recent research points to yes! .

The Financial Planning Association of Australia (FPA), recently found an incredible 81 percent of Gen Z (born from 1995-2009) would value the time spent with a financial planner.

The FPA also found that 57 percent of all Australians feel the same, pointing towards a growing desire for professional financial help. So how can financial advisers leverage the unique qualities of Gen Z to offer professional support and guidance?

 

Appeal to their digital nativity

A generation saturated with technology, Gen Z have grown up with the ability to seamlessly integrate a technological ecosystem into their everyday world.

Digital engagement is typically their preferred way to interact as they look to create strong, secure and authentic experiences with the convenience of a portable, mobile-first medium. It seems only logical to explore leveraging technologies that have been designed to cater to their technological preferences.

Utilizing social media can be helpful in disseminating content; think helpful tips and short-form videos.

Tip: A branded client app can help you deliver the technological experience Gen Z expects.

 

Understand their ethos

Though Gen Z are adapted to a digital climate, it’s important not to undervalue face-to-face communication. The Center for Generational Kinetics found in 2017 that 53 percent of Gen Z prefer a personable method of communication, over instant-messaging tools and video conferencing.

Personalised communication and support allows Gen Z to grow their financial literacy and create a well-defined mindset around personal wealth. Integrating tailored services and strategies that speak to their unique ethos is vital.

Tip: Leverage digital client surveys to personalise your service delivery!

 

Value simplicity

Decision making and experiences in real-time are vital for Gen Z. Simplifying transactions swiftly matters to this generation; as does transparent communication and decision-making.

The anxieties Gen Z face surrounding paying new “adult” bills, understanding credit and investing can be made easier with an emphasis on simplicity and trust.

Tip: Make things simple with a streamlined digital onboarding process and digital checklists to make gathering client data and tax time a breeze.

 

Engage their financial curiosity

Many Gen Z-ers were coming-of-age during the recession, meaning most saw their parents affected and Millennial counterparts amass mountains of student debt.

Cautionary tales have the majority of Gen Z wary of debt, curious about financial independence and finding the right financial institutions for them.

Tip: Give them peace of mind about their finances and where they stand by bringing together their assets and liabilities into one secure place.

You can learn more on how to tap into the emerging Gen Z market for your firm by booking a commitment-free demo with our friendly team today!

A wealth portal for the whole household

Introducing: client groups

We’re making some simple but far-reaching improvements to myprosperity this week, and we think you and your clients will be quite pleased with what’s changing.

On Friday night (18th of October at 9pm AEDT) we’ll be shutting the site down for maintenance. When you wake up on Saturday, it’ll be to the new Client Group functionality.

 

Bringing the household together

When we launched myprosperity, we were dedicated to helping individuals manage their personal finances. 

Clients have always been able to add other people as guests to their accounts, but this came with limitations. By definition, guests aren’t full account holders, which means they can’t do things like:

  • Access the mobile app
  • Sync their bank accounts or portfolios
  • Manage the wealth portal’s settings

These access restrictions are ideal when, for example, inviting relatives to view estate planning documents, but they make things a bit harder when it came to giving both parties in a household equal access and ownership over their portal.

Not to mention the logistical impact on firms, such as having each member of a household appear as separate clients in their myprosperity client list.

Grouping clients into households has been one of our most requested features, and we’re delighted to be rolling it out this week.

 

We’ve done it.

When you log in to your Partner dashboard, you’ll notice some changes to your client list, with clients now listed as Client Groups. This makes it much easier to determine which clients are part of the same household, and keeps your client list nice and tidy.

 

Moving forward, when you or your clients add a family member to the wealth portal, you’ll have the option of making them an account owner, giving them full rights and feature access. 

 

This of course is on top of our existing guest access functionality, which remains the same. Given how customisable and granular portal access can be, we’ve created some default options to make choosing the appropriate settings easier. 

 

Along with Client Groups, we’ve added the ability to customise Group Names. Whether you work with multiple “Smith Families”, blended families with multiple surnames, or you just want to create a novelty demo account (see my favourite below) – you can choose the appropriate title for each. 

FAQ’s

What does this mean for Pro client subscriptions?

Subscriptions are now at a Group level, so if you have two clients sharing the one Pro wealth portal, you will only be charged once.

What changes will my clients see? What do I tell them?

No explanations needed! Everything will still work exactly as it did before, they’ll just have new options when adding team members. 

What about my existing clients?

We’ve added a range of tools to manage the transition, such as the ability to merge accounts together and add additional co-owners. In the case of a merge, documents and To-dos from both wealth portals will be preserved, but only one set of assets and liabilities can be kept, so we’ll ask you which wealth items to keep.

Being able to group your clients into households will make client onboarding smoother, help clients take ownership of their finances, and make managing your client base easier than ever before. 

Client portal available on the Apple and Google stores: