This weeks posting is provided Cambridge Investment Research and penned by Amy Weber, President. The paper address the strategies in developing a change strategy will enable you, the Advisor to successfully adapt to the generational shift, and could potentially bridge the gap between demographics.

1. Adjusting to a Generational Shift
Developing a change strategy to bridge the generation gap
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Reprinted by permission for specific use in 2014 by The 401K Study Group.

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Adjusting to a Generational Shift
Developing a change strategy to bridge the generation gap
Amy Webber, President
D ependent on how long a professional
has been in an advisor capacity,
undoubtedly every generation served has
required an adjustment in the practice to some
degree. Baby boomers are arguably the largest
generation in history, and for more than 20
years they have remained the primary focus.
Now, a change strategy is essential to bridge the
gap between this generation and the next.
The abundance of information on the
Next Gen offers many suggestions on different
directional strategies to implement in practice.
While it is important to keep those in mind,
at Cambridge we believe that one of the most
critical aspects of Next Gen demands should
come from the thought leadership of one’s
own advisor partners. For example, the New
Century Council, an advisory council of mid
40-somethings and under, was formed in 2009
to provide definition and direction specifically
for Cambridge. Together with this advisory
council, Cambridge began defining what
needed to be done and what should be offered
to be relevant to the Cambridge Next Gen
advisor, and therefore empower those advisors
to be relevant to the Next Gen investor.
At Cambridge, we believe a one-size-fits-all
approach does not work for individuals, and
a single strategy is most likely not suitable for
every generation. It is important for advisors
to recognize the different segments of clients
within their practice scope and develop a
tailored approach. Much of the following
information comes directly from the New
Century Council, as well as other advisory
councils at Cambridge.
First, Younger Clients and
Older Advisors
The 60-something advisor should start with
assessing his/her personal goals for the practice
in terms of succession planning, as the answers
to that question will provide some key drivers
behind how to structure the plan to engage
with younger clients. For instance, if the advisor
is prepared to personally build a marketing plan
and a team around the concept of Next Gen,
the action items are potentially very different
than if he/she is more attracted to simply selling
the business to someone else who would deal
with those things. Either way, for the practice to
have value to the Next Gen client, the advisor
will need to adapt.
In the more immediate future, it seems
much of the required change encompasses a
marketing plan to build a relationship with the
Next Gen within the households that an advisor
already serves.

4. Longer term, the changes are more dramatic and need
to incorporate a different client experience.These differences
range from various communication strategies to accessing
information via numerous technological tools, as well as
varied pricing structures and engagement models. The service
model must have a customized design that is highly flexible
and comes at a low cost. To deliver various levels of service, an
advisor should be aligned with partners that possess expertise
and visionary insight on these topics, as well as a commitment
to remain ahead of the curve.
Children of Clients
A typical advisor, regardless of their age or length of practice,
most likely has clients in the boomer realm. It is important that
they also start building a relationship with the children of their
existing clients, because if they fail to do so, the advisor may
miss out on what is being referred to as the biggest transfer of
wealth in history. Various industry data indicates as much as
80 percent of those children will not stay with their parent’s
advisor when they inherit wealth1. Some of this is service model
related and speaks to the opportunities just mentioned, but
much of it is due to a lack of relationship and trust building.
Older Clients and Younger Advisors
Now, consider the million dollar question: Where are the
younger advisors coming from? Another question that may
come to mind: How is this segment of fiercely independent
advisors going to survive the upcoming changes? While
Cambridge doesn’t have all of the answers, we do have a few
strategies built around these challenges.
First, as a broker-dealer we give our clients, the advisors,
the freedom to build their business the way they see fit. Many
competitor firms have established minimum production
criteria that by default reject the young advisor – as most
of them come into the system without a book of business
of their own; and therefore, don’t meet those production
requirements. Cambridge supports its advisors if they desire
to bring in a “new” advisor. We encourage and guide these
efforts through our Cambridge continuity and succession
programs.
Second, Cambridge has taken a step further and created
an advisor facing internship program called The Next Step®.
Through The Next Step® we strive to locate the potential
Next Gen advisor, inspire them to choose a career within
our industry, introduce them to our successful offices across
the country based on best fit, and assist the advisor with
implementation of the program and training of the intern.
Female Investors
Another immediate opportunity within the investing
population is in regards to the amount of wealth that women
control – over 50 percent today, with projections to grow to
almost 70 percent by 20202. The majority of these women
do not have a gender preference when it comes to the advisor
that they choose to work with. Instead, and similar to the
Next Gen segment, women do have a preference for particular
service and engagement models, and investing is much more
about the “how” and not the “what”.
It is potentially more difficult for an advisor to adapt
an approach, based on the “how”, than if adjusting to
the “what”. It requires self-reflection and adaption of
communication style on the part of the advisors to attract and
retain women clients. Overall, the industry has not focused
on engaging the female investor that is already a client, as part
of a married couple. Sadly, over 70 percent of women plan
to seek out other advisors when their spouse passes away3.
This isn’t a growth conversation, but a retention conversation
similar to that of retaining and engaging the children of
clients.
The Emerging Investor
A 2013 Fidelity® study reflected that 61 percent of the Gen X/Y
group make their own financial decisions but work with one or
more financial advisors as sources of information and a second
opinion4. A new service model will need to accommodate the
rising number of investors looking to “co-pilot” with a financial
advisor. This model should offer education to the client, as well
as allow them to create and make their own decisions. It is also
important to enable them to validate those concluding decisions
face-to-face, because relationships and trust are essential.

5. Amy Webber, President
With over 25 years of experience, Amy Webber’s commitment
to independent rep-advisors is demonstrated in her passion
for delivering high level, personal service and leading
management solutions. Her personal interest lies with
continually refining the independent broker-dealer model
to best support the next generation of independent advisors
– including creating innovative programs such as the
Cambridge Source outsourcing program and the Cambridge
Next Step® internship program. Webber serves as a Director
for the 2014 Financial Services Institute Board (FSI), an
advocacy organization for independent broker-dealers and
their affiliated independent financial advisors. In 2012 and
2014, Webber was recognized as a member of the IA 25 by
Investment Advisor magazine and in 2011, 2010, and 2009 as
one of the Top 50 in wealth management by Wealth Manager.
About Cambridge
Cambridge Investment Research, Inc. (Cambridge), member
FINRA/SIPC, is among the largest independent, privately
controlled broker-dealers in the U.S. with more than 2,500
independent registered representatives and over $60 billion
assets under management. www.joincambridge.com.
Follow Cambridge:
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Blog
Reprinted by permission for specific use in 2014 by The 401K Study Group.
The information discussed herein is general in nature and provided for
informational purposes only. There is no guarantee as to its accuracy or
completeness. Nothing in this white paper constitutes an offer to sell or a
solicitation of any offer to buy any type of securities. Reprinted by permission for
use by Cambridge. All rights reserved.
Securities offered through Cambridge Investment Research, Inc., a
broker-dealer, member FINRA/SIPC, and investment advisory services offered
through Cambridge Investment Research Advisors, Inc., a Registered Investment
Adviser. Both are wholly-owned subsidiaries of Cambridge Investment Group,
Inc. V.CIR.0814
1(2014). Women advisors forum. OnWallStreet, 24(1), 16.
2Kogen, L. (2013). Engaging women: It’s a business issue, not a gender issue.
Financial Planning.
3Ackerman, R. (2012). Women & investing: Why many advisers are missing
out. InvestmentNews.
4(2013). 2013 Fidelity® millionaire outlook executive summary: Gen X/Y
millionaires not sitting idle. Fidelity®, 7.
Developing a change strategy will enable the advisor to
successfully adapt to the generational shift, and could
potentially bridge the gap between demographics. In
developing a change strategy, an advisor must first ask
themselves some important questions:
1. What do I need to do to develop my skills and
expertise to prepare myself to be relevant in the
future, specifically for the Next Gen or female
investors?
2. What changes do I need to make as the world
moves from an environment where technological
tools are used complementary to the service model
and relationship, to an interconnected world where
technology is simultaneous and expected?
3. Who can I partner with that is already thinking
about these issues and has resources that I can take
advantage of now for my business as I prepare?

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Selective advisors choose Cambridge. Contact us at (TheFeeExperts@cir2.com) at 877-688-2369.
www.joincambridge.com 877-688-2369
Cambridge Investment Research, Inc.
www.joincambridge.com
1776 Pleasant Plain Road
Fairfield, Iowa 52556
Reprinted by permission for specific use in 2014 by The 401K Study Group.