Speaking at the IFA Consortium Key Adviser Forum in Rome, Skandia head of wealth management strategy Neil Bage told advisers that they will have to evolve or become extinct.
Bage said: “By 2015, the people holding financial services together, the baby boomers, are going to retire, so where is your money going to come from? It will come from the next generation, Generation Y, who have a completely different mentality. You need a Y-proof proposition that uses web-based technology. This generation is information-hungry and uses the web to source most of their facts.”
Bage said Generation Ys are less concerned about saving for the future and more focused on the here and now. He said: “They have a different retirement saving mentality. Most of Generation Y would rather buy a new iPod than put away that money for the future. They know they should save but they do not. The baby boomers were never like that.
“We have new regulation coming in under the retail distribution review but this is the biggest change that advisers will have to make to their businesses. The FSA talks about treating customers fairly but there is no point if there are no customers. You must adapt your business to attract the new generation.”
Bage also expressed concern that the adviser market will shrink unless firms have succession plans in place. He said: “There are a lot of sole traders who do not have succession plans and a big chunk of those will fall out of the industry in coming years.”