Advisors aren’t worried as much about changing client demographics as they are about hiring the right advisors to serve them.
On a panel discussion at the TD Ameritrade National LINC conference, three advisors agreed that hiring a more diverse workforce, especially women, was on the top of their minds.
Ric Edelman, the chairman and CEO of Edelman Financial Services, went so far as to call the industry’s concern about demographics a smokescreen. He said most clients coming to his firm are couples and families with the same kind of investment goals, regardless of age, gender and sexual orientation. What needs to change is the kind of advisors able to give advice.
“When I look around, most people in here are white males,” Edelman told the Orlando audience. “That’s obscene.”
Darlene Murphy, the president of Wellesley Investment Advisors, agreed that though her firm has seen a subtle shift in clientele, they are still mostly married couples. Women are 50 percent of the population and can’t be considered a market niche, but the industry doesn’t have women available to serve them.
“Finding those female advisors is tough,” said Murphy, whose RIA firm handles $2.4 billion in assets under management. “We run ads and do the LinkedIn thing, and when we line up all the résumés we just don’t get the numbers of women that we would like to see.”
The panelists agreed that finding the right fit of advisors is even more important in an industry that favors the economics of scale. As firms use technology to take in more clients and smaller account sizes, Edelman and Murphy both agreed that the biggest challenge is finding the right advisors to service the accounts.
“What you’re doing today with X number of clients—if you get to 3X in a number of years, it might not work,” Murphy said.
Murphy said investing in technology infrastructure to support this scale was also a top priority for her firm, especially for client communications. She added that more clients across all ages and asset levels are asking to go paperless and reach advisors via text message.
And with an infinite amount of information available at client fingertips, Randy Conner, the president of Churchill Management Group, said his firms thinks a lot about how to leverage technology to communicate appropriately with clients, especially during market volatility.
The advisors also agreed that the need for in-person client meetings has fallen. Edelman said his firm uses Skype whenever possible and has invested to make video chat look professional. Other times, a quick phone call or email exchange is all that’s needed.
“You don’t want to annoy them with one too many emails in the inbox,” Conner said. “We want them to understand that these periods are normal, and we will go through it again… that’s where communication is key.”