How advisers can give younger clients a sense of ‘financial ease’

While many financial advisers have focused on servicing older clients that are nearing retirement – unsurprisingly given the vital importance of professional guidance for Australians in this phase of life – this has left the younger cohort of the population with fewer options.

Aiming to address this gap is Sarah Falkinder, founder of LOTS Financial Planning, who launched the new firm last year with a goal of connecting with younger clients and helping them through the accumulation phase rather than retirement.

“I wanted to shift the business in another direction in terms of who I wanted to be working with for the long term,” Falkinder told ifa.

“I couldn’t really do that under the structure that I had so deciding to kind of create LOTS and create a new business, rather than trying to kind of change the existing one.

“Part of those changes was really to have a business that was really just working with people in that accumulation stage, so a real focus on sort of Gen Z and Millennials and bringing this space of wellness together with financial planning.”

The shift for Falkinder has taken her from around 70 per cent of clients being retirees to 70 per cent being in accumulation.

According to the former accountant, taking a specific focus on a client base leads to a deeper understanding of the issues that affect them, but it also goes much further than simply taking on clients based on age.

“I find also that I'll have more success with them, because we've got that alignment in the way that we want to work together,” Falkinder said.

“There's the age-based niche, but then also the niche of the clients that will come to me are the clients who are also interested in how to find that fulfilling kind of lifestyle, compared to a client who might be more interested in how to consistently maximise returns as their main focus.

“My client will be lifestyle focused and because of that, that's why I tend to have more success with them, because they I've designed a flow in terms of an offering for the clients that suits them.”

The way she does this is through a “coaching model” that involves consistent catch-ups at least four times a year, focusing on education and helping them understand the “bigger picture of their wealth creation”.

“That allows them to keep going back to their original forecast and their original goals and seeing how they're tracking,” Falkinder explained.

“I previously worked with people where we would catch up with them on a six-month basis and I just find that for younger people, things can change remarkably in six months, whether it's different opportunities that come up in terms of their own job, lifestyle changes or otherwise it's a change in goals and something else that they want to focus on.

“Even in six months, if they have a mortgage or something like that, there can also sometimes be this kind of hyper focus on one thing to the detriment of understanding what is being aimed at in terms of their overall wealth creation.”

Taking a more proactive approach and frequently meeting with clients, she added, can help bring them back to those core concepts and create a sense of “financial ease”.

In a similar vein, providing this early can instil “sound financial principles”.

“There’s three pillars to what I'm trying to do – I call them disrupt, empower and create,” Falkinder said.

“The disrupt part is kind of disrupting this idea of what everyone thinks that you should be doing, because that's there's a lot of pressure around that, particularly in 20s and 30s, where people are trying to stick with their peers.

“But the empower part is really about that education piece and giving people their own tools and their own resources. When we can get in really early, that's when you find that empower piece really gets to hit home, and we can create these huge differences over the long term, because you get people being more consistent with their goals as well.”