It won’t be long before Gen Xers and millennials will seek financial advice in far greater numbers. In fact, they could make up about 40% of clients within the next five years, estimates Kate Healy, managing director of TD Ameritrade Institutional's Generation Next division.
The problem: Many RIAs are not prepared to meet those clients’ needs, she says.
For Financial Planning’s Lightning Round, Healy fielded rapid-fire questions about how advisors can not only reach this next generation of clients but also recruit younger and more diverse talent to the profession.
LIGHTNING ROUND: 1 minute with Kate Healy. Managing Director Generation Next TD Ameritrade
QUESTION: Biggest threat to RIA growth?
HEALY: RIAs are not paying attention to the next generation of clientele.
QUESTION: Clientele in 5 years?
HEALY: In five years, almost the majority of their clients are going to be Gen-X and millennial clients. They need to think of a different service offering.
QUESTION: How to attract next-gen clients?
HEALY: It’s not just about investments. It’s about giving them a holistic view of their financial picture. Giving them advice on career, retirement savings, debt management.
QUESTION: Fee changes needed?
HEALY: We need to think outside of the box of just charging AUM and investments and think about, how do we charge a fee for advice? How do we make it palatable to next-gen? Monthly retainers, monthly subscription models?
QUESTION: Where to find talent?
HEALY: Advisors need to get on campus and go to the financial planning programs, meet with the program directors to find your next-generation interns and associates.
QUESTION: How to attract women to the profession?
HEALY: We have to talk about what we do and showcase successful women advisors. You can’t be what you don’t see.
QUESTION: Why is diversity important?
HEALY: By 2045, we will be a majority-minority country. If we don’t have more minorities into this profession we will not be able to serve the clientele.
QUESTION: Favorite book?
HEALY: “Quiet” by Susan Cain.
QUESTION: Favorite app?
HEALY: Pandora because it is a lifesaver when I’m on the road. Huge music fan.