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Generational changes are impacting the type of advice and service which financial planners will need to give – but does this fundamentally alter their relationship with clients? Sarah Lord, client strategy director, Succession Wealth, considers the issues involved.

They enjoyed long-time tenure in their jobs; they saw predictable wage growth. Many retired on final salary pensions and have enjoyed house price inflation that has seen them become paper millionaires. It’s not difficult to see why some brand the post-war ‘baby boomer’ generation as the gilded one – people (now aged between 54-72), for whom financial planning has arguably been a much more straightforward affair. These are people with good levels of assets and increasingly good health, and they want to know how best to make the most of both.

Intergenerational planning is changing

But is the period of having such a predicable clientele about to be ending?  Many would say it has already. Many baby boomers who haven’t literally passed on, are passing their wealth down early – either to help their much more financially-pressed (and arguably less financially astute) children, or to the next generation entirely (Generation Z).

Thanks to familial wealth coming their way, in the US alone, Generation X individuals are predicted to quadruple their assets to $22 trillion by 2030, while millennials’ assets are expected to reach just $11 trillion[1]. In the UK, Royal London estimates more than £400 billion is set to “cascade down the generations to the benefit of millennials” as grandparents bequeath assets directly to them.

What does it mean?

But all this creates new questions for planners. Younger people aren’t suddenly going to become rich overnight. This is money that is going to be spread thin. In 2017, The Institute for Fiscal Studies calculated that people in their early thirties will still have average household wealth per adult of £27,000 – still about half the average which people born in the 1970s had at the same age (£53,000).

As such, the implications for what this means for financial advisers is huge – and not just because clients will have a lot less in their pots for planners to figure out how best to maximise it. Meeting the service needs of newly financially-inquisitive millennials and Generation Y should not be underestimated. According to a 2018 report[2], whereas baby boomers were found to value the facts given to them by people they perceive to be knowledgeable and trustworthy, the millennial generation will need far more convincing. It found that 87% wanted planners to protect them, but at the same time they also felt the whole financial system was rigged. They are also much more aware of where – and into which companies – their money should responsibly be invested. And, to add insult into injury there’s much more that planners need to consider.

The same report found digitally native young people now expect their advice to be accessible via more technologically-advanced dashboards and they want to be able to monitor investment performance via their smartphones.

Looking ahead

The sector is clearly at a crossroads. It has arguably spent the best part of decade (or longer), focusing and fine-tuning its efforts on how to meet the needs of a specific, but disappearing group. For the next decade (at least) ahead, the sector needs to come up with ways and propositions that not only meet demands of the boomer generation, but also Generation X and the millennials.

Learning lessons

So how significant is this change? As we consider this, the journey which the banks are going through could provide some of the answers. Outwardly, the future of high street banking, and face-to-face banking in particular, appears dead. A massive 70% of people now bank online1[3] (up from only 55% in just 2015), and it reflects a similar customer preference for speed and accessibility to their financial data. However, when HSBC bank specifically asked how its top-earning 10-15% of customers preferred to deal with it[4], a significant 26% said they preferred to interact in person.

Only this year, research by digital product agency, Somo, found young adults (aged 18-24), and those typically starting out on their banking journey, tend use a bricks and mortar branch – this differs from 25-44-year olds.

Perhaps, all of this suggests that a more nuanced, rather than a ‘start-again’ response is needed by planners. If money affairs truly are still seen as a hugely personal and emotional topic, then it’s likely that the face-to-face aspect – the demand from clients to see the whites of their advisers’ eyes – will remain. So, success in the future arguably hangs on how well planners handle the process of meeting their more diverse clients’ needs – with their wider disparity of wealth to boot.

Meeting clients’ needs

So perhaps the time is not – it could be sufficed – quite right to make advice less personal, and overly dependent on digital. Not just yet anyway. There is a growing sense that the majority of clients – across different generations – still want dedicated personal financial planning delivered to them. So, planners’ service strategy will need to be one which still creates a relationship. Clients are increasingly interested in knowing that they are going to be okay in the short, medium and long term. Because of the greater geopolitical and investment uncertainty we’re all in, they want more clarity on what they should be doing, what their financial plans should be. Planners will need to decide how they can illustrate these risks better to clients.

Know your client

To do this, financial planners will need to understand their client’s fuller needs even more. Men are still three times more likely to seek financial advice than women[5], but more women will want financial advice. This means planners not defaulting to the ways they’ve always deployed when serving their male clients. More diverse ethnic groups will also emerge wanting advice, but they will be seeking advice more relevant and specific to their differing needs. While there should always be an appreciation of who a ‘typical’ client might be, it should not be to the exclusion of the full diversity of people coming through planners’ doors.

Of course, advisers can’t forget about technology completely. It is the one aspect of modern life that continues to drive up service expectations. It may well be they need greater use of cash flow planning tools. Used in the right way, these can be hugely powerful for enhancing adviser-client relationships. Some might argue it even helps move the dialogue away from short-term investment performance, to help client focus to be more on achieving lifetime financial goals.

Put simply, clients want to feel more secure, better understood and have greater confidence in their financial future. The best way for planners to do this is to be consistent with their client experience, but to also be responsive to their individual, generational, or gender, or diverse needs.

The generation shift

A lot has changed, but arguably one thing hasn’t – the need to make clients feel like they are part of a partnership. It’s this that gives them confidence to discuss their financial affairs. Advisers and planners shouldn’t forget this.

Ultimately, there is always change. But financial planners need to be clear: one of the biggest changes they need to adapt to over the next decade is the very real “generation” shift. The best planners will make sure that they have a multi-dimensional proposition and provide service delivery that will meet the needs and expectations of individuals in each of the generations they deal with. The future can no longer be one that’s still based on the one-dimensional approach taken in the past. It is also no longer just about just giving a good client service. Clients want and expect more than just good, planners need to provide the full experience – and nothing less –whoever they work with.


[1] Data by Quantum.com

[2] “Millennials and Gen Xers need different advisor approaches.” https://www.cnbc.com/2018/01/25/millennials-and-gen-xers-need-different-advisor-approaches.html

[3] ONS online banking study 2018

[4] In 2017 – see: https://www.finextra.com/blogposting/13663/face-to-face-banking-has-been-given-a-lifeline-but-what-does-it-mean-for-loyalty

[5] https://www.ftadviser.com/pensions/2018/11/27/men-3-times-more-likely-to-seek-advice-than-women/

About Sarah Lord, Director of Client Strategy, Succession Wealth

Sarah’s role is to drive the evolution of the Succession Client Proposition and to provide an industry-leading client experience.

She is responsible for the leadership and planning of the client proposition and will continue to develop Succession as a sustainable, professional financial planning business.

Previously, Sarah was a Partner at Mazars LLP, and prior to this she was a Partner at Killik & Co LLP.

Sarah is a Fellow of the Personal Finance Society, a Certified Financial Planner, Chartered Wealth Manager and Registered Life Planner.

Said Sarah Lord: “As a planner, I believe I understand both the needs of our clients and role of the planner in how we can best engage with them to do that, day after day”.

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