Client Affairs

GUEST ARTICLE: What Wealth Management Clients Want - The Generation Challenge

Ileana Sodani, Pershing Limited, Chief Relationship Officer, 31 March 2016


It is well known that different generations of high net worth individuals will have varying requirements from advisors. However, wealth management practitioners can address the challenges, this article argues.

Here is a guest contribution from Ileana Sodani, chief relationship officer of Pershing, part of the BNY Mellon group of firms. The article here addresses how advisory requirements of differing age groups can vary; this also carries implications for how wealth managers recruit. It is of course possible to exaggerate the differences – there are points in common between a thirty-something entrepreneur who has made his or her first fortune and a retired City executive. It is not always the case, either, that the older generation of high net worth persons will be less inclined to embrace technology because retired people often have more time to engage with tech than a young, busy business person. 

We hope readers find these comments valuable and invite responses. The editors of this publication do not necessarily share all the views expressed in guest articles but are grateful for such contribution to debate.

One of the keys to success is to engage with clients at the right time, about the right thing, in the right way. It sounds simple, yet can be difficult to achieve. Identifying the trends that would help advisors better understand different client segments is paramount to their success, especially at a time when clients’ needs and preferences are so varied and complex. The messages that appeal to one segment could potentially alienate another. Digital innovation means there are more ways to communicate with clients than ever before. If one size ever did fit all in wealth management, it definitely does not today, due principally to the dichotomy of needs between clients under the age of 35 and those over 65.

Advice with a purpose

One way to ensure relationships get off to the right start is to understand why clients seek advice in the first place. Digital Horizons, our survey of 1,000 of the UK’s wealthy population, shows that relatively few clients - just 18 per cent - simply seek general financial planning. Instead, most clients approach a financial provider because they want support to navigate a major life event. 

Many of these key life events take place between the ages of 38 and 50 years. For example, a pay rise, location change or making provision for children are life events requiring planning. By the age of 45, property finance is a dominant theme but later-life marriage, divorce and re-marriage also prompt the need for financial advice during this period. 

While life events are the catalyst to engage with financial providers for those between the ages of 38 and 50, do not overlook the younger generation. Some of the most financially significant events such as selling a business happen before the age of 38. When you realise that 25 per cent of the business sales are for more than £500,000 ($715,172), this highlights the need for financial advice and planning. The challenge for advisors is that younger clients are more likely to shop around between each life event, switching provider until they find the right fit. Advisors need to concentrate on what the right fit looks like and determine how to communicate and engage effectively with this age group. 

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