CLIENT ACCOUNTS

Recently Viewed Accounts

You have no recently viewed accounts.

Select your location

Who are you ?

Select another location

Wer bist du ?

Wählen Sie einen anderen Ort

Qui êtes vous ?

Sélectionnez un autre emplacement

Qui êtes vous ?

Sélectionnez un autre emplacement

Qui êtes vous ?

Sélectionnez un autre emplacement

Wer bist du ?

Wählen Sie einen anderen Ort

Wer bist du ?

Wählen Sie einen anderen Ort

Qui êtes vous ?

Sélectionnez un autre emplacement

Wer bist du ?

Wählen Sie einen anderen Ort

Qui êtes vous ?

Sélectionnez un autre emplacement

Who are you ?

Select another location

Who are you ?

RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1 OR 2

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

Marketing & Client Acquisition
Build a multigenerational growth strategy

6 MIN ARTICLE

These days, successful client acquisition looks more and more like a family affair.


Our Pathways to Growth: 2021 Advisor Benchmark Study of more than 1,500 advisors found that among the highest growth practices, advisors were 8% more likely to work with multiple generations of clients and offer wealth transfer planning. In fact, this was even a stronger indicator of growth than having a large percentage of high net worth clients.  


And while estimates of the great wealth transfer from the baby boomer generation vary widely — anywhere from $30 trillion to $68 trillion at last count — the fact remains that generations of inheritors will be looking for professional financial guidance in the coming decades. But it’s not just investment expertise that will win the business stemming from this money in motion, says Leslie Geller, wealth strategist at Capital Group. “One aspect that’s often overlooked is that large inheritances don’t come in the form of lump sums that are ready to invest. Instead, they will very often be in the form of trusts, which will come with a lot of legal and technical issues,” she says. Having the ability to help with those issues, and to get the family involved in planning for them, is one way advisors can add value.


With all that potential business out there, how do you reach and engage these multigenerational clients? Here are a few ideas to consider.


Get to know clients’ families


If you have a family-focused practice, you may be familiar with clients’ children and grandchildren. You may have even engaged them with regular birthday and graduation cards.  But getting to know them as adults may take a bit more work on your part. 


One way to start making those family connections is through social media. If your knee-jerk reaction is that your high net worth clients aren’t on social media, you may be missing the bigger picture. While your clients may not be on social media, their kids and grandkids may well be. There are more high net worth individuals on LinkedIn than you might think, and that platform offers a perfect opportunity to reach out and introduce yourself to family members.  


Another important step for next-generation planning involves getting serious about tech. This means not only being able to talk to them on social media, but also having a strong digital presence in general. Younger investors are used to comparing brands and validating decisions online, and are more likely to do business in a virtual arena. The good news is that a strong digital strategy can be a major differentiator in driving business growth. Fewer than 10% of advisors in our benchmark study considered themselves expert in marketing or digital marketing, but the highest growth practices were more than twice as likely to identify as expert in these areas. 


The truth about youth
In our recent advisor benchmark study, the highest growth segment was more likely than the average advisor to serve clients under age 40.

Table showing clients by age for the average advisor compared to the highest-growth advisor segment. Clients age 18-39 are served by 17% of advisors on average and 26% of the highest growth advisor segment. Those age 40-55 are served by 45% of advisors on average and 41% of the highest growth advisors. Clients age 56-74 made up 35% of the average advisors’ client base and 31% of the highest growth advisors. Clients 75 and older represent 1% of both the average and highest growth advisors. Two percent of advisors on average preferred not to say, compared to 1% of the highest growth advisors who said the same.  The source is Pathways to Growth: Capital Group’s 2021 Advisor Benchmark Study.

Source: Capital Group, Pathways to Growth: 2021 Advisor Benchmark Study

Offer next-generation planning


It’s always tempting to dismiss the younger generation and their unfamiliar ways, but the reality is that younger clients represent the future of your business. You can invest in this future by finding a way to offer them financial planning services.


Often, how to do this is a matter of staffing. Experienced principal advisors may see value in having junior associates on the team who have the bandwidth and the background to more easily engage with younger generations. Indeed, one industry report recommends that the junior advisor on every team should be “commissioned to connect with the next generation of affluent clients.”


That’s the strategy taken by advisor Karen DeRose of DeRose Financial Planning Group in Chicago. DeRose hired her two grown sons — one as a paraplanner, the other in marketing — to help her practice better relate to the younger family members of existing clients. A second-generation advisor herself, DeRose’s firm serves at least three generations of clients: those who started working with her father and are now in their 80s and 90s, their children in their 50s and 60s, and grandchildren in their 30s and 40s. Her firm now offers what she calls a “next-gen foundational plan” to help younger clients with buying a home, paying for school, understanding stock options and company benefits, and managing basic financial planning. Longstanding clients love it, she says, because it shows that her team cares about the thing clients value most: their families.


While the work may be foundational, client service expectations remain high. The millennial generation may not have the same assets as their parents or grandparents, but they expect more control over their finances, and they’ll have little problem replacing you with another advisor if you’re not fitting the bill. Geller notes you should consider having younger clients work with someone in a similar demographic — not just on your staff, but in your center-of-influence network as well. Make sure your list of referrals for tax or estate planning attorneys also includes gender and cultural diversity, says Geller.  


Consider a family wealth briefing


Another way to engage multiple generations is by broadening your menu of services to include estate planning and charitable guidance. And get the family involved. Among advisors in our benchmark study whose practices are experiencing the highest growth, 73% offer estate planning services, 68% provide family education and generational wealth transfer advice, and more than half advise on charitable giving. 


The value of multi-gen services
Advisors reporting the highest growth in our benchmark study are also more likely to offer value-added services related to estate planning, charity and family wealth.   

Table shows a list of service offerings among all advisor respondents compared to the highest growth advisors. There are a few that are considered table stakes: retirement planning is offered by 94% overall and by 99% of the highest growth advisors. Investment management is offered by 94% total and 94% of the highest growth advisors. Financial planning is offered by 89% of total advisors and 96% of the highest growth advisors. Annuity products are offered by 79% total and 87% of the highest growth advisors. Life insurance is offered by 76% total and 80% of the highest growth advisors. Educational planning is offered by 63% of advisors total and 69% of the highest growth advisors. The highest growth advisors were much  more likely to offer value added services such as estate planning, which is offered by 58% of advisors total and 73% of the highest growth advisors; family education and generational wealth transfer is offered by 55% of advisors total and 68% of the highest growth advisors; charitable planning is offered by 44% of advisors total and 53% of the highest growth advisors. Tax planning and strategy is offered by 51% of advisors total and 54% of the highest growth practices. Finally, banking services are offered by 32% of advisors total and 30% of the advisors with the highest growth. The source is Capital Group, Pathways to Growth: 2021 Advisor Benchmark Study.

Source: Capital Group, Pathways to Growth: 2021 Advisor Benchmark Study

   

The connection between these value-added services to multigenerational business is clear, says Geller. “If you’re just talking to clients about investments, you’re not getting to families,” she says. “But if you talk to them about tax or estate planning, for example, you’re in a better position to have conversations about longevity, inheritance and implications for the next generation.”


She notes, however, that there’s no reason to feel intimidated by adding these new services. Little things can make a big difference. That is, your tax and estate planning offerings don’t need to be full-scale services in the traditional sense. They can be as simple as facilitating intra-family communication and transparency.   


One way to accomplish this, she says, is by holding a family wealth briefing: a virtual or in-person gathering to discuss the ongoing management and governance of the family’s wealth. As a facilitator of this event, the advisor should prepare a careful agenda, which could include:

  • Financial education and responsible wealth management
  • Family mission and values
  • A wealth update or “state of the family” presentation 
  • Ongoing roles, responsibilities and expectations of family members

Quote says: "Just talking to clients about investments you're not getting to families," says Geller. "But talk to them about tax or estate planning you in a better position to have conversations about longevity., inheritance and implications for the next generation."

Because family dynamics can be challenging even in good times, your goal is to advocate for your client without taking sides. But the more you engage with family members now, the greater the opportunity to work with them after a wealth transfer. 




Learn more about
Marketing & Client Acquisition
Planning & Productivity

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

American Funds Distributors, Inc., member FINRA.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.