In the next few years a large number of clients will retreat from the active management of their investment and protection plans and increasingly look to their children for guidance, according to independent consultancy Business Health.
Business Health partner Terry Bell said of the group’s database of more than 40,000 Australian advisory clients, 51 per cent were aged over 60 and were likely to begin discussing their financial strategies with their children, who would become their major beneficiaries.
“As clients get older they will consider all of their options, such as selling off property and moving into retirement, and I think a lot of them will look to their children in regards to what they should do,” Bell said.
“That is why it’s important going forward that advisers take the opportunity to meet the children of their key clients or those children might opt to see another adviser about their family’s financial situation.”
He said because of the relationship between parents and their children, advisers could get an endorsement from the existing client, which at the same time was a great way to recruit potential next generation clients.
“Even if existing clients’ children do not want to become a client themselves, having that relationship with them will still be vital as they will have influence over what steps their parents take,” he said.
He said 2009 and 2010 had been challenging for advisers, with many spending more time maintaining clients than recruiting them.
“Going forward there will be more of a focus on acquiring clients because a large portion of clients will begin to draw down, so what better place to start than with the warm referrals from family members,” he said.
He said Business Helath statistics showed 87 per cent of existing clients were willing to refer their advisers.
