7 Best Practices of Successful NextGen Advisors

This is a summary of a panel from the Money Management Institute’s 2014 Annual Convention.  The panel included representatives from a wide range of distribution channels, including a wirehouse, insurance broker-dealer and an online advisor.

Moderator: David Berkowitz, President, Lincoln Financial Network
Panel:   Eli Broverman, Co-Founder & COO, Betterment, LLC
James J. Detterick, Managing Director, Corporate Client Group Director, Morgan Stanley
Andrew J. Wigzell, Senior Financial Planner, Barnum Financial Group, MetLife

How important is it to establish relationships with children of Baby Boomer clients?

Over the next decade, Baby Boomers will be retiring at the rate of 10,000 per day.  Since Boomers make up a large percentage of most advisors books, if they don’t reach out to their children, eventually they won’t have clients left at all, Wigzell pointed out.  As a 41 years old advisor, Wigzell will be retiring sometime in 2037.  He said that he plans to keep adding clients who are younger than he is so that he will have clients to manage when he retires.

Wigzell is used to working with clients in the 49-65 year age bracket, so he recently added a Gen Y’er to his team to focus on reaching younger generations through the use of technology. 

In sharp contrast to the other panel members, the median age of Betterment clients is a mere 35 years old, Broverman reported. The firm’s methodology of engaging with investors through digital means is the primary reason for this, he stated.

Broverman quoted a statistic that 71% of Gen Y’ers would rather visit the dentist than go to a physical bank branch.  (He didn’t mention who came up with that unusual question or how many people were surveyed, but I would imagine they have very healthy teeth)  While it’s well-known that younger people are more inclined to use technology, another statistic he cited was that 4 out of 5 people across all demographics prefer to bank online.
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Ten Ideas for Advisory Business Success from Mark Tibergien – Part 2

 

This post is a summary of a session from the MMI 2011 Fall Solutions Conference.  It is part 2 of a 2 part series.  You can read part one by clicking here.

The speaker for this session was Mark Tibergien, Chief Executive Officer of Pershing Advisor Solutions, a BNY Mellon company.

6. Don’t Forget About Business Continuity and Succession Planning

When Mark was looking for an advisor to manage his own money, one thing he avoided was solo practitioners, since they often do not have succession plans. He knew that he didn’t want to be looking for his teeth and glasses at the same time he would be looking for a new advisor!

The average age of principals is increasing and succession is a huge challenge, Mark informed us. The advisor population is skewed towards the upper end of the age range. There are just as many advisors who are ten years away from retirement as there are advisors that are three years away, he reported.

Mark emphasized that the fiduciary relationship with clients must be maintained and all efforts should be made to do everything in the client’s best interest. Putting a succession plan in place is definitely in the client’s best interest! Succession planning is a growing need, he said.

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