Now that the holidays are in full swing, I’m engaging in my annual tradition of reflecting on what I’ve accomplished over the past year and then mapping out a plan for personal and professional growth in the New Year.
As the Head of OppenheimerFunds’ Private Client Group, I’ve also spent considerable time thinking about what financial advisors must do to strengthen their practices in 2017. By taking the following steps, I believe advisors can forge a stronger connection with the families they work with, and position their practices for sustainable long-term success.
- Familiarize Yourself with Sustainable Investing
If you’re not already familiar with this concept, set aside a little time over the holidays to learn about impact – and environmental, social and governance (ESG) – investing. These types of investments are growing in popularity and generating plenty of media buzz, but many investors and advisors are still unsure of what they are. ESG funds invest in companies with strong ESG practices. Impact investments seek to generate a measurable social or environmental impact along with a financial return. Through our research with Campden Wealth, we’ve learned that wealthy Millennials have a strong interest in these products and are looking to their advisors to provide them with investment opportunities.
- Develop – or Refresh – Your Social Media Strategy
The next generation of wealthy families wants to see your online presence. They don’t want to just Google you and get whatever the search engine turns up. They’re looking to social media to get a sense of who you are and who they’re going to be doing business with. Make sure your LinkedIn account is up-to-date and that you’ve included a profile picture on your page. Use your account to tell a story about yourself. I’ve found that many advisors either lack a social media presence or have a stale online persona, which is understandable considering the restrictions that many investment firms have. But as long as you stay within the boundaries set by your company, social media – LinkedIn in particular – is a great way to have your presence out there.
- Make Connecting with Wealthy Millennials a Priority
We’ve covered this topic in detail within this space, but I’ll say it once more. It’s absolutely critical to the long-term health of your practice that you cultivate the next generation of clients. The largest transfer of wealth in American history is already underway.1 We’ve found that when wealth passes on from one generation to the next, the inheritor often finds a new advisor. But, if you have an existing relationship with your clients’ heirs, you can significantly minimize the risk of this happening to you. In 2017, I strongly recommend you make meaningful progress on this front.
- Build Personal Relationships with Your Clients’ Heirs
Many people use the holidays as a time to go home and reconnect with family. For advisors, this could be a great opportunity to have face-to-face meetings with your clients’ heirs. Politely push your clients to make an introduction. Let them know how important this is to both you – and to their family long term. Find out what the heirs are looking for in a financial advisor. Talk to them about their own vision for the family wealth, their plans for the future, and the legacy they hope to leave for future generations. Relationships aren’t built overnight, but you can use this initial conversation as an opportunity to lay a foundation. Then, make sure to check in with them periodically.
- Make Financial Literacy Your Calling Card
Financial literacy can be a valuable tool in your effort build relationships with wealthy Millennials. Help them gain a deeper understanding of the financial world around them. You can assist them, in a very low-key way, in positioning themselves to make very good financial decisions. If you do this right, you’ll accomplish two key things. First, you’ll get to know them as individuals. Second, investing your time in their financial literacy will position you for a long-term relationship with them.
- Help the Next Generation Build a Network
High-net-worth Millennials who come from families with generational wealth typically don’t have a broad circle of friends from similar backgrounds. As a result, it may be hard for them to find a safe space to discuss financial issues with their peers. But you may have a book of clients who are similar both in wealth and family situation. This means you’re in a unique position to create a network for these young adults. You could host a mixer where they can meet in an informal setting. Perhaps you can structure it around a topic that may be interesting to them, and host an open discussion. If you plan this correctly, they’ll form relationships with each other, and the group can take on a life of its own. Instead of always meeting with you they can meet with each other. But they’ll never forget that you helped to foster those new relationships.
This is the latest installment in our monthly series about issues facing high-net-worth families and their advisors. To learn more about what HNW Millennials want from their advisor, read an executive summary of the Proving Worth study, or gain access to the full report.
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These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.