The world is changing. Has your approach to financial planning also changed? Have you modified your methods, your messaging, and your mindset to effectively connect with clients in today's dynamic market? These are questions that financial advisors must consider as market-driven forces reshape the profession and give rise to uncharted territory.
From seismic shifts in wealth ownership, to greater market fragmentation, to the impacts of social media, the industry is experiencing unprecedented transformation that shows no signs of slowing. Despite this, what has not changed is the desire for financial security, protection of loved ones, and, ideally, retirement some day.
To resonate with today's clients, financial professionals must adapt to the disruption and rethink how they do business. Those who fail to do so risk losing their competitive edge and client loyalty.
"It is only to financial professionals' own detriment that they choose to ignore, or they don't fully appreciate, the magnitude of the change or the implications to their own business. I wouldn't say this is exclusive to this industry, but people have a tendency to take the ostrich approach and just stick their head in the sand. Well, that doesn't work with finance," said Joel Liu, Head of Advanced Sales for MassMutual Strategic Distributors distribution channel.
To help financial professionals achieve greater success, this article takes a closer look at the forces reshaping the profession and the proactive measures that advisors can immediately set in motion.
Shifting sands
Before diving into how financial service providers can better connect with today's clients, it is important to first gain a greater understanding of how the market is shifting and the implications. Let's take a closer look.
Perhaps one of the most profound changes on the horizon is the transfer of wealth ownership that is projected to reshape the financial landscape in the coming years.
Aptly coined "the great wealth transfer," it is estimated that wealth transferred through 2045 will total a staggering
The Baby Boomer generation will represent more than half (63%) of all transfers, according to Cerulli, with $53 trillion to be handed down to the younger generation. Meanwhile, in the nearer term, the Silent Generation households and older are poised to transfer $15.8 million.
Gen Xers, who are most likely to report experiencing "
However, even with the great wealth transfer, there are several notable nuances to consider like the rising wealth of women.
Women already account for, or influence, a significant portion of all buying decisions, and their impact on the economy and role in financial decision-making will only increase. In fact, over the next decade,
Now throw into the mix societal changes underway and increased segmentation stemming from more ethnically diverse households, expanded definitions of sexual orientation and gender identify, and political polarization that feeds into a growing lack of trust in institutions.
As wealth transfers and societal changes fuel shifts in family dynamics, as well as engagement preferences in today's tech-driven environment, financial advisors must learn to adapt and better connect with today's clients. Ignoring the disruption or, even worse, resenting it will prove detrimental for the profession.
Take action
Regardless of the generation that clients represent, their origin, or how they define themselves, there is one common goal among them: to avoid financial hardship and protect their loved ones. The time to act is now.
In today's complex and challenging environment, the expertise that financial professionals possess is needed now more than ever to help clients achieve their goals and strengthen their financial literacy.
Consider this: research reveals that financial literacy within the United States is in a dismal state, hovering at around
The good news is that financial professionals have access to the resources they need. The products and financial tools have not changed. What has changed is how advisors connect with and educate these new markets.
How can advisors succeed and adapt to the disruption?
- Be open minded
- Be proactive versus reactive
- Leverage the right resources
"The first step for many [advisors] is just to realize that there is a shift and the significance of the shift means that they will now have to start using language that they didn't use before or at least adapt that language to a different audience. It is almost like speaking an actual new language," said Liu, noting that, for instance, the definition of loved ones will be different and the definition of a comfortable retirement will be different.
Added Liu, "The way that financial advisors have to adapt is they have to figure out how to relate to those new demographics or those new market segments. They also have to realize that the market segments themselves may also be fractured (i.e., the increasing
Fortunately, financial professionals are not alone in their journey. Turn to a partner like MassMutual, which has the expertise and innovative tools and resources that professionals need to navigate the complexities and better resonate with clients.
"[MassMutual Strategic Distributors] recognize that there is this new market segment and we are part of a historic, very well-established mutual life insurance company that has had an affiliate distribution channel for a long time, but the company doesn't just rest on its laurels," said Liu. "We continue to innovate. We continue to improve the way we do things by doing what we can to meet the American people and to meet the clients where they are, and that's through independent brokers and that's through a lot of different other avenues we have here at MassMutual. By supporting the research to help us identify those trends and help financial professionals take advantage of those trends."
For more information about MassMutual Strategic Distributors, go
This article is sponsored by MassMutual Strategic Distributors.
MM202709-310300
