Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Research shows enormous potential exists for advisers to capture emerging affluents
New research has found that $2.5 trillion in wealth is set to change hands from baby boomers to their younger benefactors over the next two decades. This intergenerational wealth shift has enormous potential for financial advice firms to reinvent themselves and capture this upside potential according to CoreData.
The Advisable Australian survey conducted by CoreData was the basis for Netwealth’s research report, The emerging affluent. The report identified an up-and-coming cohort of powerful and wealthy “emerging affluent” Australians who are creating significant wealth and are most likely to seek financial advice over the coming years.
“The emerging affluent are advisable Australians who are the ideal future clients for financial advisers, now and in the future. They are younger individuals with higher-than-average incomes, household wealth that is growing, and a strong appetite for investing,” the report highlighted.
These younger individuals with higher-than-average incomes are keen investors with time on their side for their wealth to grow, the report highlighted.
“Under 45 years-old, wealthier individuals, highly engaged and interested in investing, most likely to seek an adviser,” the report said. “This group has an appetite that understands investment advice and isn’t afraid to seek support from a financial adviser.”
Being younger, the group is more than likely to have more significant life-events that drive uncertainty and change. Netwealth’s findings offer advisers guidance on attracting, managing and retaining the emerging affluent.
“The emerging affluent is the smallest group measured by number of people, yet it is the second-largest group in terms of household wealth,” the report noted. “There are 1.5 million emerging affluent individuals, with household wealth totaling $2.2 trillion.”
To attract individuals from this cohort, the report recommends the use of effective marketing techniques.
“Develop unique content (whether that be an article, video or podcast) on topics that are useful in helping the emerging affluent decide whether to use a financial adviser or not,” it states.
The emerging affluent are also highly tech savvy, so it makes sense to educate via digital channels.
“Using digital tactics including your website and social media such as Facebook or LinkedIn (both paid and organic listings) to distribute this content.”
The research suggested advisers should aim to build trust in their service offering by showing how their business can meet client needs and provide value. Using educational content and digital marketing strategies is one of the most effective ways of reaching the emerging affluent.
According to the report, social media is the preferred and most effective medium to publish this content.
“Almost three quarters (73.9 per cent) of them using social media daily, whether it be Instagram, Facebook, LinkedIn or another platform.”
The research recommended advisers produce thought-provoking content. “Interesting articles or blogs, commissioning research, produce podcasts or record video interviews that are likely to pique the interest of emerging affluents.”
Research showed emerging affluents have a relatively high financial capability, so content topics should appeal to their greater financial knowledge and awareness. Using podcasts is a great way to captivate this audience.
“Podcasts are a medium enjoyed by the emerging affluent: more than four in 10 (43.7 per cent) of them listen to a podcast daily and a more than three in 10 (32.8 per cent) listen to one each week – which means a staggering three-quarters (76.5 per cent) listen to a podcast at least once a week.”
The findings from this paper showed that there is a real opportunity for financial advice firms to position their value offerings to appeal to the emerging affluent.
“For wealth businesses to thrive into the future the emerging affluent is a critical market to be aware of, if they are not already servicing them today.”
