TD Ameritrade Institutional 2014 National Conference

2 ways advisers can successfully reach NextGen clients

Jan 30, 2014 @ 12:00 am

Runtime: 2:26

Tom Nally, president of TD Ameritrade Institutional, highlights two strategies advisers should employ in order to reach and build strong working relationships with younger clients.

The annual RIA conference taking place January 29th to February 1st in Orlando, Florida.

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Video Transcript

So, some of the biggest trends facing REAs right now is the demographic shift in wealth. We're seeing an enormous transfer of wealth from the baby boomer generation to generation X, Y and the millennials and that's causing a tremendous amount of shift within the industry where advisers need to take a step back and make adjustments to their business model to be able to take advantage of that opportunity so it doesn't become a challenge. There's really two ways that we recommend advisers engage the next generation. First, it's to think about and understand what are the different communication preferences and the values that those next generation investors and advisers have and then also to embrace junior advisers. You wanna make sure you're bringing junior advisers into your firm and actually that's something we've seen a lot of advisers implement strategies to accomplish. What advisers really need to do in order to make that leap, to make that transition is take a step back and look at their business through a different lens. Most advisory firms were structured to serve the values and the needs of the baby boomers and now we're moving into a whole generation that has different preferences and different values, so you need to think about your business differently. And what that means is maybe a different value proposition for folks that aren't necessarily has high net worth as the baby boomers. Maybe it's having a different, you know, work environment to adapt to the preferences of that junior planner that can relate better with that next generation investor. Investors wanna work with advisers that are of their same age so they can relate and they understand a little bit better, so you need to make structural changes to the way your business is structured to make sure that everyone understands each other. If there was one change that advisers can make to their business right now, I would suggest that they hire a junior planner. It makes a tremendous amount of sense because it enables them to give confidence and peace of mind to the adviser's existing clients over the future of the firm. And it also enables the junior planet to engage their next generation. That next generation of investor like we've mentioned wants to be able to work with someone their own age and then also the numbers work out in your favor as people that hire a junior adviser report 44 percent greater income per owner and a 15 percent faster growth rate, so it all works out.

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