Problems facing planners

Many financial planners are facing a major business issue in that their traditional client base is dying off, according to James Turnbull, manager of Macquarie Adviser Services.

The average planner’s typical client is aged 55 or more, retired and conservative. And they generally have significant lump sums of money to invest, he told a group of advisers.

But as these clients age and die, the planner needs to look to the next generation for new clients, the aging baby boomers aged between 35 and 55, Turnbull says.

There are two problems with this generation. They think differently from the older generation, tend to be cynical and are generally bored by the idea of financial planning. As well, "they have a high belief they can do it themselves," he says.

The other problem is that while they may have reasonably high incomes, they don’t tend to have large lumps of capital sitting about. Nevertheless, attracting these people as clients is vital for the future of the industry.

"Maybe if you can show them something sexy, they may get interested," Turnbull says.

One such lure could be Macquarie’s Titan hedge funds. The first was launched a few months ago and the firm is preparing to launch a second such fund. The prospectus is due in early August.

Titan 1 Trust is a "fund of funds" type structure which aims to diversify and minimise risk and volatility.

Key features of the Titan 1 Trust was that investment in it could be geared up to 100% so long as the client is able to pay the interest on the loan, which would suit such difficult baby boomers, and the capital invested is guaranteed by Macquarie Bank. The currency exposure is also fully hedged.

Commenting is closed