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Who Needs a Financial Advisor?


Written by: Matt Oechsli | The Oechsli Institute

Dallas: “At what level of asset accumulation does your Affluent Research say that people realize they need a financial advisor?” asked Jeremy during the Q & A session following my speech.

Hmm… Do you think most people know when they need to see a dentist?  Do you think many are confused about when to schedule an appointment with a physician?  

In our recent Q2 2015 Affluent Consumer Research, we asked the following question:

At what level of assets do you think a person needs a financial advisor?

Common sense would suggest that the answer would be fairly straightforward; at some higher level of assets “financial advice” is sought after.  As you can see in the chart below, the responses are all over the place.


The good news is that only 1% of the largest future economic force, Millennials, say they will “never” need a financial advisor.  However, the above chart serves to highlight the confusion the affluent consumer has regarding financial advisors.  Who is a financial advisor?  What services do they provide?  When do I need their services?  Is hiring a Robo-advisor the equivalent of hiring a financial advisor?  These questions go on and on.

Can it be that the billions of dollars financial firms are currently spending on advertising is confusing the exact market they are targeting?  It certainly appears that way.  The ads mostly show vague images of retirees and families with Labradors.  It’s not like they say “contact us if you have or will soon have $250,000.”  Advertising to today’s affluent consumer is a tricky business.   The chart below provides a glimpse into “truth in advertising” from the affluent perspective.

What’s the takeaway with all of this?  From an affluent consumer’s perspective, advertisements that paint a perfect scenario without an ounce of specifics might seem confusing, vague, and somewhat disconnected from reality. Confusion breeds distrust.  

So what should financial advisors do?  

Make certain that you are meeting with the millennial children of your affluent clients – whether they (or their parents) see it as immediately necessary.  Remember – they don’t really know when they need you.

Only 21% of today’s affluent say their financial advisor expressed interest in working with their children.  Reassess your minimum standards for the family unit.  Think about the size/growth of these accounts in 5 years, not how they look today.

Let’s face it, the odds are that many of today’s Millennials living in the same areas where they grew up are using the same dentist they visited growing up.  But only 20% are using their parent’s financial advisor (probably of the 21% who expressed an interest).

According to their affluent parents, from a combination of earnings and inheritance, many of today’s Millennials are going to be tomorrow’s affluent client with well over $1 million of investable assets.  This should be a priority for financial advisors.  

Take the confusion and ambiguity out of the services you offer.  

The more time you spend with your affluent clients (and children), the less their confusion and greater their trust – in you.  Where the next generation first receives their financial advice, is likely to be where they’ll get it in the future.  

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