A great wealth transfer may indeed be looming, but advisory firm executives are still focusing their creative energy on their boomer (and older) clients.

That was one of the key findings of a poll quizzing the broker-dealer and RIA firm executives at Fidelity’s annual Executive Forum, which hosted about 300 clients of the company's custody and clearing units. When asked which investor group's needs most influenced their innovation strategy, a startling 61% of executives singled out baby boomers -- far ahead of Gen X (14%), Gen Y (9%), older clients (6%) and either women or business owners (4% each).

"I was a little surprised at just how pronounced their focus was on baby boomers," says Mike Durbin, president of Fidelity Institutional Wealth Services. "We've been focused for few years on need to engage other generations."


The results suggest that executives face a "balancing act" when it comes to shifting attention away from the older clients who make up the bulk of their business, Durbin says. "The principals are saying, 'I can't give up on [boomers] -- they're the core of my practice."

Durbin notes with interest the finding that executives defined innovation as client engagement (23%) and service delivery (26%) almost as much as technology (30%). That's actually good news, he says, pointing to the fact that, at the end of the day, financial advice "is still a very human, relationship-based business."

But the poll revealed executives' underlying anxiety about their competitiveness.


While the largest number of respondents said their top priority was the need to differentiate their firm amid increased compensation, only about half had a positive view of their firm's own level of innovation. And almost half said that most of the new ideas came from top executives or the leadership team -- suggesting that they had failed to create a firmwide culture of openmindedness.

That cultural issue ties in to a greater problem, Durbin says: "These firms are not appropriately prepared to address the client base that stands to inherit a substantial amount of money."

Among Fidelity's clients, Durbin says, the firms who are successfully shifting emphasis to younger clients are doing so via hiring strategy. "If you go into a firm that has a growing footprint in next-generation clients -- or female clients, or a particular ethnicity -- they'll have people that reflect that population."

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