While the Gen X/Gen Y and Baby Boomer investor markets are equivalent in size and wealth, there's one trait that sets them apart.
Boomers tend to be delegators when dealing with financial advisers, whereas younger investors want more of a participative process in which the adviser acts as a coach and partner. In short, Gen X and Gen Y investors want your help, but also want to remain in control. Think of their approach as “trust, but verify.”
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As we've discovered in our MFS Investing Sentiment Survey, this dynamic is reflected in the way younger investors seek financial information. They expect their adviser to provide them with information, but having grown up with computers and cable TV, they are perfectly willing and eager to go anywhere and everywhere for information on their own.
Email? CNBC? Twitter? LinkedIn? The Wall Street Journal? YouTube? Blogs? Yes, yes and yes.
• Younger investors readily use and trust digital channels, with 57% of the Gen Y group and 47% of Gen Xers saying that the financial information they publicly access via the Internet is just as good as the information they would get from a financial adviser. Only 33% of Boomers share that belief.
• They are open to new ideas and investment options, with 76% of Gen Y investors and 71% of Gen Xers wanting to be more knowledgeable about investing than they are currently (vs. 62% of Boomers) and 64% of Gen Y and 54% of Gen X investors saying their portfolios could benefit from different ideas or approaches (vs. 33% of Boomers).
Everyone's looking everywhere
Since younger investors want your help and since collaboration is the style they prefer, use all the electronic and media tools that are available and pass muster with your compliance department.
• Want to know about a prospective client? Go to Google, Facebook, Twitter and see what comes up. See who the prospect knows professionally on LinkedIn. Check out where the prospect lives on Zillow.
• While you're checking out prospects, remember that prospects are checking out you. So make sure your content on social media sites is up to date and reflects your marketing niche. Again, check with your compliance officer before doing anything online.
• Email, tweet and otherwise alert your younger clients to information you find useful. Your opinions, explanations and shared ideas are valuable and show that you care about the specific needs of your Gen X and Gen Y clients. Send them to items of interest on sites you trust.
• Don't knock business television, embrace it. Many advisers aren't fans, but CNBC, Bloomberg and Fox Business are on TV screens in brokerage firms across the country. Investors are watching too. You may not agree with many of the talking heads' ideas, but don't make media the enemy. You will appear out of touch.
The time to communicate with Gen X and Gen Y investors is now. If you dawdle, an unusual window to serve affluent investors who need help is going to close. Don't miss the opportunity.
About the Series
Financial advisers seeking to expand their business may not be aware of the potential afforded by Gen X and Gen Y investors. Wealthier than most advisers realize, these younger investors want help. But their expectations of advisers are different from those of Baby Boomers. Using data from his firm's extensive Investing Sentiment Survey, William Finnegan, Senior Managing Director of Global Retail Marketing at MFS Investment Management, offers insights into tapping this huge, underserved market through a series of six articles.
About the Survey
MFS, through Research Collaborative, an independent research firm, sponsors a regular online survey among individual investors with $100k+ in household investable assets and who make or share in making financial decisions for their households. Generation Y investors are those under the age of 33; Generation X is defined as investors between the ages of 33 and 47.
About MFS Investment Management
MFS is a premier global money management firm with investment offices in Boston, Hong Kong, London, Mexico City, Săo Paulo, Singapore, Sydney, Tokyo and Toronto. The firm's history dates to March 21, 1924, and the establishment of the first US “open-end” mutual fund. MFS manages $303.6 billion in assets on behalf of individual and institutional investors worldwide, as of September 30, 2012. Please visit MFS.com/InvestingPulse for more information.