Five Tips For Working With Working Investors


Advisors spend a lot of time working with retired investors, who currently represent the largest percentage of Millionaire households.  In fact, more than 50 percent of Millionaires are currently retired and 9 percent are semi-retired.  But it’s important to remember that 37 percent of Millionaires continue to work.  Not only do these investors represent a significant portion of total investors, they also represent the future, and therefore they are critically important for financial advisory firms.

Spectrem Group just completed research with investors entitled Working with the Working Investor and discovered there are five key elements advisors must consider when trying to attract or retain working investors.

Only half of working investors have a financial advisor.  This means that there is significant opportunity for financial advisors to work to obtain these individuals as clients during a time when they are building assets and need financial advice.

1. Working investors like to remain involved with their investments but have trouble finding the time to properly devote to their finances.  More than half of working investors (58%) like to be involved in the day-to-day management of their accounts and 54% enjoy investing.  Financial advisors need to understand that working investors are really looking for their advisor to be a sounding board as well as someone to reach out to them with advice when appropriate.

2. Working investors have different concerns than retired investors.  Forty-five percent of working investors are worried about aging parents.  Forty-one percent are worried about financing the education of their children.  This is in addition to ensuring they save for their own retirement.  Clearly the approach that needs to be taken with working investors is different.  They may have debt as they work to meet all of their pressing financial obligations.

3. Working investors want to communicate with their advisor via email more than retired investors.  In fact, 79% or working investors like to communicate with their advisor via email and 27% want to text with their advisor.  While only 12% had used video-chat prior to the pandemic, a significant number of investors are now open to that option.

4. Working investors need to update their financial plan more frequently than retired investors.  Two-thirds of working investors with an advisor currently have a financial plan.  That means many of those without an advisor and at least a third of those with an advisor need to develop a financial plan.  Those investors who do have a financial plan indicate they are more loyal to the firm that created their financial plan.

5. Any relationship with working investors requires a discussion about their children.  A significant percentage of working investors continue to have dependent children.  Those children impact their financial circumstances substantially.  More than half of working investors would like some to extensive help with education/college planning from their financial advisor.  Additionally, they want to discuss life insurance planning to ensure that their family is protected.

Life-cycle advice is one of the most important parts of financial planning and financial advisors need to focus on assisting investors as they wade through some of the more complicated parts of their financial life.  Developing a trusting relationship earlier in an investor’s life will lead to long term profitable relationships.