Younger clients used to the immediacy of the modern world tend to struggle to understand that wealth is created over decades.
I deal with a different demographic to most advisers in the UK. My firm’s average client age is substantially lower than that of the wider industry, at mid-30s. I work with two main subsets of clients as well: young professionals/business owners and sports professionals.
My clients are generally accumulators, working their way up in the world. I can relate to many of them as I am 35 myself, running my own business and a former (not very good) sports professional – football in my case. We get to share experiences, both good and bad.
But one of the real difficulties in working with this demographic is the immediacy in which they expect everything. Clients are used to it all being done there and then.
If they want to buy something, they can do so in one click on Amazon, and have it arrive the same day. If they want to transfer money to a friend, they can do so instantly via a text message.
The younger generation do not appreciate the time things used to take and the shift that has occurred.
Financial services has not quite embraced the speedy world we live in. You want some information from Legal & General? You must email them (they thought it would be a good idea to dispense with phones) and wait for a response in three days’ time. What about Zurich? Well, you can speak to them, but expect a response in 10 working days. It really is hard to comprehend what takes them so long.
These companies are so at odds with how fast the world is moving now that I find it difficult to believe people will be using them in the future. I can tell you now that I will not be.
But then the issue with investors is the polar opposite. The major problem here is patience. I can often be heard saying “don’t just do something, sit there”.
Wealth is created over decades. Clients should practise good habits over many years; they should focus on their work and their life, while letting investments do what they are supposed to do in the background.
Everyone wants to know what is happening now, now, now. How something has performed over one year, two years and so on. It is counter-productive for an investor to be so focused on investments when they cannot control the outcome.
I often use the Christmas turkey example. If you are cooking a turkey for the family and it is supposed to be cooked over eight hours, you wouldn’t open the oven after half an hour and ask if it’s ready, would you?
Investment horizons really need to be looked at over a 10, 20 or 30-year period. With the world changing so quickly from technological advances, it is really difficult to keep clients on the straight and narrow. What has always worked in the past may not any more.
I don't know all the answers here but all I can do is keep clients focused on making the most of their life, their income and their assets because, in the long term, we all end up in the same place. Clients need to enjoy the time they have while they have it, balanced with patience in perspective.