The issue is critical as financial advisers generally have minimal connections with the heirs of their clients' wealth. Joffe emphasised that advisers could lose around two-thirds of their managed funds unless they proactively build relationships with younger clients. CoreData's findings suggest that a managed fund of $500 million could plummet to $180 million within one generation if advisers fail to secure intergenerational trust and relationships.
Besides highlighting these stakes, Joffe outlined effective strategies for advisers to appeal to younger demographics. Millennials, aged 28 to 44, are characterised by their tech-savviness and attraction to purpose-driven brands, having witnessed the digital evolution. Gen Z, those aged 12 to 27, have never known a world without the internet and are further immersed in digital content, making platforms like YouTube and TikTok integral to their lives.
To effectively reach these groups, advisers must implement three key strategies: producing authoritative content that fosters trust, utilising digital tools to deliver personalised client value, and offering practical online guides. As Australia anticipates a wealth transfer of approximately $3.5 trillion from baby boomers to younger generations, the onus is on advisers to become trusted navigators for these unprepared and underserved groups.
Despite belonging to a profession traditionally viewed as expert-driven, advisers must acknowledge that Gen Z and Millennials rely heavily on advice from family, friends, and social media influences over professional advice. A Flux survey confirmed that while baby boomers value expert opinions, younger generations prioritise personal trust, presenting both a challenge and an untapped opportunity for advisers.
Some advisory practices have adapted by recruiting younger advisers targeting new leads from clientele in wealth-building phases. Moreover, the rising interest among younger clients in home loans points to the strategic hiring of mortgage brokers as another valuable engagement method.
