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Written by: Thilan Kiridena, CFP® ChFC®
Introduction:
On June 4th and 5th, I had the pleasure of being present at the Bloomberg Office in NYC to participate in the Bloomberg Invest Summit in NYC. A "Next Generation Wealth" session featured speakers Raj Dhanda from Ares, Ida Liu from Citi Private Bank, and Saira Malik from Nuveen. These industry leaders shared valuable insights on next-generation wealth management and discussed the evolving landscape of the financial industry. As a member of the Financial Planning Association's NexGen team, this article analyzes the transcript to provide financial advisors with five key takeaways from the summit.
1. Embracing Structural Changes in the Economy:
Saira Malik highlighted the importance of adapting to structural changes in the economy. She emphasized two critical themes: asset allocation and money in motion. Financial advisors should consider diversification into alternatives to provide inflation protection and diversification. Additionally, with a significant wealth transfer expected in the next few years, advisors should focus on building early bonds and trust with wealth inheritors to retain them as long-term clients.
2. Next-Gen and Millennial Clients:
Ida Liu discussed the growing importance of Next-Gen and Millennial clients, who represent an incredible market opportunity. These clients seek simplicity, digital accessibility, and a focus on impact investing. Financial advisors should prioritize educating, empowering, and elevating these clients, offering them easy-to-use digital platforms, personalized financial education, and customized investment strategies aligned with their values.
3. The Rise of Alternative Investments:
The speakers unanimously emphasized the value of alternative investments. Raj Dhanda noted that private markets, such as private credit and private equity, offer diversification, exposure to real assets, and potential inflation hedging. Financial advisors should consider incorporating alternatives, such as farmland, timberland, and infrastructure, to enhance portfolio returns and reduce risk.
4. Impact Investing as a Separate Asset Class:
The panelists agreed that impact investing is gaining prominence and will likely become a separate asset class in the future. Next-Gen clients prioritize investing with purpose and want to make a positive impact without compromising returns. Financial advisors should leverage ESG platforms to help clients express their values and invest in areas such as renewable energy, clean technology, and sustainable solutions.
5. The Evolving Role of Financial Advisors:
While technological advancements, such as AI and automation, are transforming the industry, human advisors remain indispensable. Clients still value the expertise, guidance, and personal touch provided by financial advisors. However, advisors need to adapt to technological advancements and leverage tools that enhance productivity, facilitate digital onboarding, and deliver seamless experiences. Financial advisors should embrace AI as a source of information and focus on providing personalized advice and tailored investment strategies.
Conclusion:
The Bloomberg Invest 2023 provided valuable insights for financial advisors. As the wealth management landscape evolves, advisors must embrace structural changes, cater to the needs of Next-Gen and Millennial clients, consider alternative investments, incorporate impact investing, and adapt to the changing role of technology in the industry. By staying informed and implementing these key takeaways, financial advisors can better serve their clients and navigate the ever-changing economic landscape.
Thilan is the Founder/CEO of Capital Elements Advisors Inc. A New York-based financial planning and advisory firm specializing in Life Insurance Premium Financing and other structured financing solutions for Small Businesses.
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