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Attracting the younger client to your business 

Having a younger client base can build foundations for the longevity of an adviser business as well as increase the value of the business in the market. But how do you go about attracting younger clients and make them profitable for your business now? Fiona Bond spoke to a number of business owners about how they are tackling this issue

A recent study by and MetLife revealed that the best age to seek financial advice for retirement is 25, giving individuals ample time to save larger pots for their later years.

But while millenials could undoubtedly benefit from financial advice to help achieve their life goals, there remains the question of how profitable a client they are.

Scott Gallacher, director, Rowley Turton, believes RDR and the demise of pensions / investment commission has prevented professional advice to younger clients from being profitable, and says paying a firm’s fees generally doesn’t pose a good deal for those just starting out on the savings and investments path.

Jason Witcombe, director, Evolve Financial Planning, agrees that cost remains an issue: “One of the problems we face as a nation is how people with more modest sums of money get advice and plan for their future. The majority of firms prefer to receive ongoing fees, and these tend to come from older clients with accumulated wealth.”

However, for advisers looking to grow their business and have a firm to either sell or pass on, the importance of a younger client bank cannot be ignored.

Long-term strategy

Steve Danson, director, Banks Wealth Management, says: “I would like to build a business I could sell one day, so for me it’s important to increase our share of the 30-50s market.”

Danson created a mortgage department within Banks Wealth Management three years ago, which he says provides him with the opportunity to engage with a younger audience he could potentially turn into financial advice clients.

He says: “The younger client may not be lucrative right now, but in the long-term they will be and I think businesses like mine need to look at it from the perspective of longevity.”

Chapters Financial founder Keith Churchouse is also adopting a long-term view.

“A lot of clients in their 30s and 40s may not have a great deal of cash now, but we have to remember that they will soon be those clients in their 50s, with greater wealth, which will sit with us as a firm.”

In a bid to appeal to a younger audience, Churchouse has launched an online low-cost website,, specifically targeting the 28-42 age range.

“There is a gap in the market for this age group – banks have pulled out of advice and advisers are growing older, so firms need to be thinking about how they can engage with younger clients.

“Those below the age of 42 are a lot more dynamic than older generations and much more technology-savvy. They are used to shopping around to get the best deal and using aggregators, and the financial advice industry needs to move towards that type of distribution model if it is to appeal to younger clients. There is also a cost issue to be considered,” he says.

SaidSo offers clients a financial planning report, covering objectives, needs and any additional guidance for £299. Clients then have the option of paying £159 to have SaidSo implement those recommendations, and a further £129 for a review.

“While there will always be a place for face-to-face advice, I do believe that internet-based models will start to address basic and medium financial advice needs,” says Churchouse. “SaidSo is carried out purely online and in reality, we are finding more and more people prefer to work that way.”

Intergenerational Planning

Increasing numbers of advisers are looking to tap into the younger market through their existing clients.

Andy Baker, partner, Equilibrium Asset Management, says the company works with a lot of their clients’ children, who are often in greater need of advice than their parents.

“When your time horizon is so far into the future and there are many variables such as having children, increasing your salary and paying mortgages, it is difficult to know how much you should be saving and where /if your money should be invested.”

To help, Equilibrium started using Voyant four years ago and says the results were so good the firm now uses the system across all its clients.

Baker says advising clients’ children puts the firm in a unique position of having an understanding of the whole family’s financial circumstances.

“It would be a real shame to struggle financially while you have small children to find that at the age of 70 you are a millionaire as a result of inheritance,” he says. “The service we offer for clients’ children increasingly appears to be a reason for parents to work with us, as the parents are often keen for their children to be educated, financially astute and able to make good decisions.”

Working with different generations of the same family in matters of inheritance tax also allows advisers to produce an intergenerational financial plan to suit everyone’s needs.

Different approach

Understanding the differing needs, challenges and concerns of younger clients is of paramount importance if firms are to successfully increase their client bank.

Alan Smith, chief executive, Capital Asset Management, says: “For those in their 30s and 40s, concerns are likely to include buying a family home, mortgage advice, ensuring their family is protected in the event of death or serious illness and education costs. In addition, standard financial planning considerations such as investing surplus income and saving for retirement need to be considered.

“If this comprehensive service model, designed with younger clients in mind, is packaged up as a ‘Wealth Builder’ programme, and charged on a flat monthly retainer, it can be very appealing to the target audience.”

Baker says younger clients appear to be less focused on investment performance, and more concerned about financial and often, tax planning.

“For younger clients, our job is to ensure finances fall evenly across their lives and aspirations. It can involve a lot of work for us initially to collect the requisite information and build their financial plan so it doesn’t always pay particularly well in the short term, but it is probably the most satisfying part of my job showing someone their future is financially secure,” he says.

The introduction of younger advisers into the fold could also aid firms’ growth in this area. While older advisers have the advantage of experience and wisdom, younger advisers may be in a better position to relate to their clients’ goals and struggles.

Gallacher says firms considering working with younger clientele should target people just starting their careers or businesses, possibly liaising with local universities to offer basic financial planning seminars.

Witcombe agrees the industry could benefit from exploring different ways of making younger clients, with smaller pots of cash, a viable market for advisory firms.

“An option would be if financial advice were offered through the workplace,” he says. “If we could help employers understand that having a financially stable workplace is in their interest, we could potentially see companies funding financial advice as part of a benefits package, enabling both firms and young clients to form a relationship.”

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