Advisers who want to engage with Gen X and Y clients should leverage mobile devices, new research from Telstra has revealed.
The telco’s latest digital thought leadership research report, entitled The Digital Investor, found that 77% of Gen-Xers and 82% of Gen-Ys own a smart phone, and one in two in these age groups own a tablet. Telstra also reported that Gen X and Y are the most ‘informed, media saturated and connected generations ever’.
But despite their mastery of digital technologies, almost half of Gen X and Gen Y said they did not feel confident managing their finances. ‘This highlights an ongoing and valued role for professional advice with regard to management of personal finances,’ the report stated.
Presenting the findings at the FST Media Future of Insurance Conference in Sydney this month, author of the report, Rocky Scopelliti, said there was a clear opportunity for advisers to engage with Gen X and Y via digital media.
Advice is absolutely and inextricably linked to confidence
“Advice is absolutely and inextricably linked to confidence,” Mr Scopelliti said. “We found that only one in three Gen X and Y Australians are actually getting financial advice. That means of the 9 million Gen X and Y Aussies, only 3 million are actually getting advice. This isn’t meant as a criticism. This is a huge opportunity. How can we create and structure advice to meet the needs of those 6 million people?
“Advice as it is structured and delivered today is not cutting it for two in three of these customers. We need to rethink the proposition.”
According to Mr Scopelliti, one of the key factors to be considered when engaging Gen X and Y is the notion of ‘self-direction’.
“Self-direction is not the same as self-service. Self-service is about convenience and choice. Self-direction is about control. The most contemporary example of self-direction is the explosion of self-managed super funds. 70% of SMSFs are being taken up by Gen X and Y. Self-dependence and control are some of the main reasons for this.”
Steve Holmes, Co-Founder of Feedsy, which specialises in digital media solutions for financial advisers, says applications for mobile devices are a great way for advisers to leverage this concept of client self-direction, by delivering content that is easily accessible and relevant.
“Unlike most communication streams, an app lets the client determine when and where they want to engage. You can prompt them to visit the app by sending a notification (via email or sms) that there is new content available, but ultimately the client retains control,” Mr Holmes explained.
“Instead of using a different application (and log-on) for each wealth management product supplier, the client can simply use the adviser’s app to view their entire portfolio, as well as access educational videos and articles, which helps position the adviser as an expert.”
In his report, Mr Scopelliti also highlighted the importance of advocacy in driving decision-making among Gen X and Y.
Advocacy is how consumers will decide which provider they use
“Advocacy is by far and large the single most important influencer on the one in three Gen X and Y consumers who do decide to take out advice. Advocacy is how they will decide which provider they use. It’s absolutely important to weave that into your thinking about how to connect with these generations,” Mr Scopelliti said.
For Mr Holmes, this is another area where applications ‘come into their own’, positioning the adviser’s brand as the ‘hero’:
“When an adviser has their own application, it puts their logo and name right in front of the client every time they look at their device,” Mr Holmes said.
“Imagine if your client is at a BBQ with friends and they’re asked whether they have a financial adviser. Not only can your client say yes, but they can also show that friend their adviser’s app then and there.
“Similarly, an app acts like a ‘remote control’ for social media. If a client reads an article or watches a video that they want to pass on to their friends, with one ‘click’ they can share that content via Twitter or Facebook.
“Apps are a value add for your ongoing service, and also give you a ‘status’ in your clients’ lives.”
