As a financial advisor, finding new clients is vital for business growth. However, amid numerous strategies, there’s frequently one overlooked opportunity, engaging “2nd Gen” clients.

The “boomers” are the richest generation in history and they will soon pass down their wealth to their kids. Trillions of dollars are expected to flow into the hands of the “2nd Gen,” reshaping the financial landscape over the next 5-20 years.

Some of the best advisors are already taking this long-term view and engaging “2nd Gen” clients as part of their long-term business strategy.

We’ve put together this guide to help share valuable insights on how to cultivate relationships with “2nd Gen” clients.

Building strong relationships early and embracing technology solutions can help you improve efficiency and make “2nd Gen” clients more profitable and easier to engage.

The “Great Wealth Transfer”

The “boomer” generation is the wealthiest generation in history. In the next 10-20 years there will be an unprecedented transfer of wealth to the “second generation”.

These “2nd Gen” clients, the children of boomers, stand to inherit trillions of dollars in assets, making them a significant demographic in the financial planning industry in the near future.

Building relationships with these “2nd Gen” clients can help ensure a smooth transition of assets and increase the value of financial services firms who do it well.

It’s important to start building relationships with “2nd Gen” clients early, helping them prepare for this inevitable wealth transfer, but only a small percentage of financial services firms have figured out how to help these types of clients efficiently.

Start Building Relationships Now

While “2nd Gen” clients may initially seem “unprofitable” due to low assets and high debt, it’s important to start building these relationships early to help them prepare for the inevitable wealth transfer that will occur in the future.

Building strong relationships early on, despite current financial situations, positions advisors to be valuable partners when the wealth transfer occurs, ensuring strong long-term relationships.

Proactive advisors have started building relationships with “2nd Gen” clients early and there are a few strategies to make that easy and efficient.

Use Technology

Unlike previous generations, “2nd Gen” clients have grown up immersed in technology. They are tech-savvy individuals who value efficiency and convenience.

They prefer the convenience of online meetings. They prefer working collaboratively. They value transparency. They value advice instead of products.

Embracing technology solutions can help you improve efficiency and make “2nd Gen” clients more profitable.

When preparing to work with “2nd Gen” clients it’s important to embrace technology solutions like Calendly for booking meetings, Google Meet or Zoom for video calls, and collaborative financial planning tools like Adviice to create detailed financial plans and provide AI driven insights.

This not only improves efficiency but also makes your financial practice more attractive for tech-savvy “2nd Gen” clients.

Offer Fee-Only Advice

Because “2nd Gen” clients may not have the financial resources to meet asset minimums it’s important to provide alternative fee models to help engage these types of clients.

“2nd Gen” Clients…

• May be more cost-conscious
• Place more value on unbiased advice
• Seek transparency in financial recommendations
• Value advice over products

To solve this problem you may choose to introduce a fee-only option designed specifically for “2nd Gen” clients. This fee-only option may include additional touchpoints for coaching and questions rather than just investment advice.

You may even ask parents of “2nd Gen” clients to help subsidize these fee-only engagements. Allowing them to avoid financial discussions amongst family and instead use the expertise of the advisor.

Educate and Empower

Engaging “2nd Gen” clients requires a different approach. Provide educational resources like videos and webinars to empower them in making financial decisions. By actively involving them and addressing their specific financial needs, you can build more informed and confident clients in the future.

“2nd Gen” clients have unique needs…

• Paying off debt
• Planning for family/kids
• Buying a home
• Starting to use RRSP, TFSA, FHSA accounts

Provide A Self-Directed Platform

Another important factor to consider is that “2nd Gen” clients grew up with the internet and prefer to explore on their own, learning as they go, doing their own research.

Providing a collaborative financial planning platform like Adviice allows “2nd Gen” clients to build their own financial plan, use the help resources to learn more, and then seek feedback when they get stuck or have a more complicated question.

This is not only more attractive for “2nd Gen” clients but it is also more efficient for advisors.

Take A Multigenerational Approach

Taking a multigenerational approach will make your financial services practice stand out.

Position your practice as one that understands the dynamics of family wealth. Teach your clients about the benefits of multigenerational planning and encourage early gifts to help “2nd Gen” clients maximize tax advantaged accounts like TFSA, FHSA, and RRSP.

This strategy can increase overall family wealth and also helps prepare the next generation for larger gifts and inheritances in the future.

Incorporating these strategies into your financial practice not only ensures you prepare for the “Great Wealth Transfer” but also shows that you understand and meet the unique needs of “2nd Gen” clients, adding value and ensuring the sustainability of your financial planning practice.