Advisers need to change their business models if they are to attract the next generation of clients, according to a new research from consultants AKG.
It found that nine out of 10 advisers recognise the need to develop new service and fee models and embrace new technology in order to attract younger customers and appeal to new segments of the market.
However half of these advisers said cost margins (47 pr cent) and the cost-of-living crisis (50 per cent) was holding back such transformation. A further 47 per cent also identified regulation as being a potential barrier, and the time taken to make these changes (cited by 41 per cent).
Typically advisers are targeting men and women with families, but the AKG report found advisers were increasingly looking at new areas, such as business owners, specialist sectors (such as doctors or the armed forces) as well as young families and the spouses or partners of existing clients.
AKG said the paper is designed to prompt debate and discussion over the key conundrums for the advice sector over the next five to 10 years.
AKG director Matt Ward says: “Although some firms may be comfortable with their focus on servicing existing clients, over the longer term those aware of the requirement to future-proof their client base and the value of their business will recognise the need to develop new client acquisition strategies.
“This will not necessarily be easy, and the situation is exacerbated currently by client wherewithal in the cost-of-living crisis and the perceived cost and regulatory issues facing advice firms.
“Whilst expanding footprint via relationship development with wider family units will play a key role, firms will need to get creative with their targeting, acquisition and servicing strategies for the next generation of clients. This will inevitably require digital/ technological support to create cost and process efficiencies but will also need a deeper understanding of future client requirements.”
