Displaying items by tag: client adoption

Advisors aiming to strengthen relationships with younger affluent investors may want to enhance their AI knowledge, as a new survey suggests. Conducted by Boosted.ai, the survey found that younger high-net-worth (HNW) individuals are increasingly incorporating AI into their daily lives and expect their financial advisors to do the same. 

With 82% of respondents describing themselves as AI-proficient and 56% using it regularly, many are looking for advisors who integrate AI into their services. In fact, 35% of younger HNW individuals would consider leaving their current advisor if they aren’t adopting AI. 

As a generational wealth transfer looms, adapting to the preferences of tech-savvy clients becomes critical. However, the survey also reveals concerns about AI, particularly around data security and regulation.

Finsum: This is a huge shift in adoption of this technology and advisors might want to integrate this into their practice for new client adoption.

RNMKRS, a company based in Larchmont, New York, leverages artificial intelligence (AI) to enhance sales training. By creating an AI persona called Alex, the system simulates customer interactions and provides feedback to sales representatives, helping them improve their communication and selling skills. 

Since its inception, RNMKRS has trained around 30,000 sales professionals from over 100 companies. Co-founded by Stefanie Boyer, a marketing professor at Bryant University, the platform is grounded in her extensive research on learning science and sales performance. 

The AI-driven system has role-played over 500,000 conversations, refining its ability to give consistent, data-backed feedback. Boyer believes AI has the potential to transform human-to-human communication by offering non-judgmental, constructive criticism.

Finsum: Advisors really need to utilize the full capabilities of artificial intelligence to grow and expand their business, and sales training could be a very valuable addition. 

The asset management industry is seeing a significant shift towards Separately Managed Accounts (SMAs), with assets growing by 30% over the past two years, according to Cerulli Associates. This growth is expected to continue, with projections suggesting SMAs will reach $3.6 trillion in assets by 2027, up from $2.4 trillion today. 

SMAs offer tax advantages and personalization options that are appealing to investors, allowing them to hold individual securities and tailor portfolios to their specific needs. SMAs are particularly useful for strategies that benefit from direct ownership of securities, such as tax-loss harvesting and options overlays, which can enhance after-tax returns and generate additional income. 

The rapid innovation in this space means that SMAs are becoming an increasingly attractive option for investors looking for a personalized approach to asset management.

Finsum: We expect the SMA boom to continue with trends in both demographics and wealth management in the US, so familiarity is key.

While social media can help financial advisors connect with younger clients, expert Diane Delaney emphasizes the importance of creating personalized experiences for them. Delaney, Executive Director of the Private Risk Management Association (PRMA), advocates a three-pronged strategy alongside social media efforts:

1. Personalize engagement for each client.

1. Use a combination of online and in-person communication.

1. Offer options based on individual needs.

Understanding the younger generation’s financial concerns is crucial, as they face unique challenges like student debt and inflation. Delaney suggests using authentic, jargon-free communication and real-life examples to resonate with this generation. Additionally, social media can be a valuable tool for educational content, such as podcasts and short videos, to better reach younger audiences.

Finsum: Leverage technology to personalize both communication and service with clients. 

According to a Ficomm Partners survey, today's retirees are the last generation to rely heavily on referrals for choosing financial advisors. Over the next five to ten years, digital marketing will become increasingly crucial for attracting clients.

While 60% of those over 60 prefer referrals, only 17% of those under 44 feel the same. Instead, 57% of younger investors hired advisors based on digital marketing, compared to 20% of older respondents. 

This shift indicates that advisors must adopt a multi-tactic digital marketing strategy to stay competitive, as younger clients prefer researching and making purchases digitally. Additionally, the survey found that no single digital channel was superior; a mix of channels was necessary for effective marketing.

Finsum: Social media literacy is a must to staying in touch with this new generation of investors.