The amount of demographic advice and data with which advisors contend is astronomical. One day , they’re being told focus on baby boomers. The next day it’s millennials.
Sometimes, it’s women and, of course, there are the seemingly never-ending calls – ones met by industry desire – to add more wealthy prospects to the ranks of being clients. From a demographic perspective, it truly is dizzying for advisors.
Let’s not forget business owners. Some advisors have built practices around entrepreneurs, founders and other business owners. For example, it’s not a stretch to say the Bay Area of California is home to many advisors catering to tech founders and venture capitalists. Likewise, a region with an above-average share of say lawyers is apt to have some wealth management practices focusing on clients in the legal field.
And these days, more advisors, particularly younger ones, are focusing on clients that are building wealth through social media and other internet-related businesses. The point is business owners of all stripes need and want to work with advisors, but many aren’t reaching out to make those connections.
Big Opportunity Awaits Advisors
Explaining why many business owners aren’t hiring advisors is a largely speculative exercise. For many, they simply think they don’t have the time. For others, they may be worried about fee structures while others likely think there’s time for them to work with fiduciaries down the road. What isn’t up for debate are the points about need and advantages.
“Only 24% of those we surveyed have met with a financial professional in the past year in response to current economic conditions,” according to Nationwide. “Yet nearly a quarter say getting advice would bring peace of mind, especially as they juggle rising costs, workforce challenges, and succession planning.”
From an advisor’s perspective, the business owner challenge likely requires the former make the first move. That could pay off over the long run because many small and mid-size business owners are currently dealing with issues such as using personal cash to support the business or reducing retirement savings to keep the company moving smoothly.
“Despite these signs of strain, most aren’t having conversations with a financial professional. That’s where you can play a pivotal role,” adds Nationwide. “By recognizing where personal and business priorities intersect, you can help business owner clients stay focused on the bigger picture — including life after work. Yes, even while they’re navigating short-term financial pressures.”
Conversation Topics Matter
Smart advisors know that prospects have expectations regarding what’s communicated in initial meetings. The challenge arises from prospects keeping those standards close to the vest and business owners probably aren’t different in that regard.
That means advisors need starting points before meeting with founders and business owners. Fortunately, those foundational pieces aren’t exotic. They boil down to subjects such as how the business can access credit, employee retirement plans and other benefits, retirement planning for the founder, succession planning and risk management tools for the business.
“Financial professionals who can meet business owners where they are — understanding both the business and personal risks the owner is trying to solve — are in a strong position to offer differentiated value,” concludes Nationwide.
Related: These Are the Segments Where Advisors Prefer ETFs Over Mutual Funds