Advisers had better adapt to the modern family — or else: Study

Who is the investor of the future? Research points to crucial demographic shifts toward the modern family with 'younger demographics' that advisers need to get ahead of. Or get left behind.
JUL 24, 2013
Much of the firm-wide message delivered to attendees at Pershing's annual Insite conference had to do with changing demographics and how advisers need to shift their pursuit of new clients. On June 5, the firm announced the results of a new study and report entitled "Investor of the Future: The Quest for Tomorrow's Affluent Clients Must Start Today." More than 350 financial advisers working with Pershing completed the survey. Among the findings: Half of Americans are single and many women are the sole or primary breadwinners. Also, same-sex marriage is now legal in 10 states, and it is estimated that racial minorities will become the majority in the U.S. by 2042. In a press briefing to discuss the findings, Kim Dellarocca, head of practice management and segment marketing at Pershing, suggested that advisers need to be increasingly aware of these shifts and the potential they pose for forming new relationships. "We are trying to build awareness of the investor of the future and how the demographics of those seeking advice are dramatically changing," she said. "In 15 years, a huge number of current clients are going to be in the decumulation phase of retirement so new clients are going to have to come from other, younger demographics." Another conclusion of the report is that advisers are not prepared to deal with their clients' children. While more than half of clients have children 18 years and older, advisers surveyed have only spoken with 35% about finances. In addition, only about half of advisers responded that they "offer expertise in inter-generational wealth transfer" and only 46% offer offer expertise in trust services. Ms. Dellarocca noted that only three-fourths of advisers reported that they have met with both the man and woman in a married couple. "They say they want women as clients but tend to have met only with male heads of household," she added. She noted that a lot of heirs and widows are poised to fire their parents' or spouse's adviser in the future. Indeed, it would behoove many advisers to engage in some tactical outreach. "Younger advisers do tend to be more open-minded in general," she said, but later added that 70% of women would prefer working with a woman adviser, suggesting that the broader based of older male advisers might see some improvement with a little of that outreach. For more information on the report or to get a copy, visit the FutureInvestor page online.

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