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A millennial's perspective: The frustrating misconception advisers have about building a Next Gen value proposition

Determine how your offering can flex along with your clients' needs, no matter their stage in life or circumstance.

May 14, 2018 @ 1:04 pm

By Aaron Schaben

Over half of all United States households are now members of a single digital platform and universal client experience. Sound impossible?

In Amazon's annual shareholder report, Jeff Bezos announced the company has more than 100 million members globally, and analysts estimate nearly 70 million of those members are in the U.S. With Amazon already disrupting major retailers through hard-to-beat pricing, free two-day shipping and access to an increasing amount of content (books, movies, music), the financial services industry has a lesson to learn, from the outside looking in.

Think about all the things Amazon does "right" for its customers. The company's dedication to complete satisfaction. Its immediate response times. Its ability to make our lives easier. And then consider how drastically our profession could change if a company with that much brand power and customer loyalty entered the marketplace. Advisers would find themselves paralyzed reading a headline like, "Amazon Adds Financial Advice for 100 Million Prime Users."

While most advisers look at this and see an arms race for their clients, the headline hides a bigger truth, something most firms in our profession haven't even considered: a single, seamless, online user interface for every generation. No separate tool set or functionality "for millennials" or "for retirees." A single platform with a uniform experience for every generation.

Too many advisers mistake technology as a generational preference. Building a compelling online experience isn't just a "millennial thing." Technology knows no age and spares no generation. Shift your focus away from looking at how to serve different generations and instead look inward. Determine how your offering can flex along with your clients' needs, no matter their stage in life or circumstance.

I'm a strong believer in one competitive advantage: the better able advisers are to build a consistent, seamless, compelling experience, the faster they grow. Technology is central to this premise. It allows us to evolve, to innovate and to adapt with the scale, efficiency and personalization the modern client has come to expect.

Amazon knows this. Yet the financial services industry has yet to catch on. Herein lies the immense opportunity. So what can you and your firm do to tackle this elusive challenge? Look no further than the Red Hot Chili Peppers' 2011 hit, "Look Around."

"Look around, look around, look around

All around, all around, all around…"

The lyrics may sound repetitive, but that's the point. This process should be constant. Ongoing. Iterative in nature. Examine your current offering, study the way you interact with prospects in all stages of life, assess your current technology and ask yourself how you can build a consistent experience. Rinse and repeat continually.

To help you apply this way of thinking to your firm, start by asking some very challenging questions. "When we discuss the next generation of client…"

1. Is there any diversity in the room? No, I don't mean diversity of age, gender, background, race or experience. Concentrate on the diversity of thought. If your great debates are held among people who look the same, use social media in the same way, spend their time engaged in the same activities, vote for the same candidates and support the same causes, then you are wasting time and energy.

2. Does our team ever use the line, "Because that's the way we've always done it"? Does your firm have a dedicated leadership team or a sole decision-maker? Is the leadership team full of "yes" people, or are new thoughts and perspectives allowed to challenge the old way of doing things? When was the last time a new, well-formed idea was executed instead of being overshadowed?

3. What is the average age of our clients? Is it plus or minus 10 years of the age of their adviser? Do your clients look like your founder or adviser team? If you run the numbers, how does the average age of your clients compare to the advisers servicing them? One way to counteract our natural tendency to be within 10 years is to create a defined career path for your team, no matter their position or role.

4. Is our team invested in our culture and passionate about what we provide our clients? When was the last time someone on your team referred a new client or a new stakeholder to the team? Both scenarios are leading indicators of how your culture is adopted and perceived by those who work for and with you. Your first client is your team, and if they aren't fully engaged, your client service and daily interactions will undoubtedly suffer.

5. Would the firm I have today easily outperform the firm I had five years ago? If your answer is no or you have to think about it, review the above questions, look around and be brutally honest with yourself. Your competition is not only the adviser next door; it is every experience your clients have, especially when they aren't with you.

It's time our profession put more focus on our biggest blind spot: our own misconception about Next Gen and technology. Our challenge isn't how we serve the next generation. It's how we innovate our value proposition and the technology that supports a single, immersive experience, no matter the generation.

We must look inward instead of outward. Stop using "millennials" and "technology" synonymously. And most importantly, take responsibility for where we've fallen short. It's on us to adopt more of an "Amazon mentality" by rethinking the way we deliver value. The modern-day client, of every generation, will expect it of us.

(More: The transformation of the adviser-client experience) http://www.investmentnews.com/article/20180423/BLOG09/180429971/the-transformation-of-the-adviser-client-experience

Aaron Schaben is the executive vice president at Carson Group.

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