Advisors need to develop a strategy that will enable them to successfully adapt to the generation shift that is occurring. It is important for Advisors to recognize the different segments of client and develop a tailored approach to serve them. This weeks White Paper is provide by Cambridge Investment Research and they put forth some ideas to help tackle the changing generational landscape.

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BUILDING SUCCESSFUL BUSINESSES BY TAPPING INTO
THE NEXT GENERATION OF ADVISORS
Reprinted by permission for specific use in 2015 by The 401K Study Group.

2. Amy Webber, President
Jeff Vivacqua, Senior Vice President
Business Strategy
Dependent on how long a professional has
been in an advisor capacity, undoubtedly
every generation served has required an
adjustment in the practice to some degree.
Baby boomers are arguably the largest
generation in history, and for more than 20
years they have remained the primary focus.
Now, a change strategy is essential to bridge
the gap between this generation and the
next.
The abundance of information on the Next
Gen offers many suggestions on different
directional strategies to implement in
practice. While it is important to keep those
in mind, at Cambridge we believe that one
of the most critical aspects of Next Gen
demands should come from the thought
leadership of one’s own advisor partners.
For example, the New Century Council,
an advisory council of mid 40-somethings
and under, was formed in 2009 to provide
definition and direction specifically for
Cambridge. Together with this advisory
council, Cambridge began defining what
needed to be done and what should be
offered to be relevant to the Cambridge
Next Gen advisor, and therefore empower
those advisors to be relevant to the Next Gen
investor.
At Cambridge, we believe a one-size-fits-all
approach does not work for individuals, and
a single strategy is most likely not suitable for
every generation. It is important for advisors
to recognize the different segments of clients
within their practice scope and develop a
tailored approach. Much of the following
information comes directly from the New
Century Council, as well as other advisory
councils at Cambridge.
First, Younger Clients and Older
Advisors
The 60-something advisor should start with
assessing his/her personal goals for the
practice in terms of succession planning, as
the answers to that question will provide
some key drivers behind how to structure
the plan to engage with younger clients.
For instance, if the advisor is prepared to
personally build a marketing plan and a team
around the concept of Next Gen, the action
items are potentially very different than if
he/she is more attracted to simply selling the
business to someone else who would deal
with those things. Either way, for the practice
to have value to the Next Gen client, the
advisor will need to adapt.
In the more immediate future, it seems
much of the required change encompasses
a marketing plan to build a relationship with
the Next Gen within the households that an
advisor already serves.
®
BUILDING SUCCESSFUL BUSINESSES BY TAPPING INTO
THE NEXT GENERATION OF ADVISORS

3. Longer term, the changes are more dramatic and
need to incorporate a different client experience.
These differences range from various communication
strategies to accessing information via numerous
technological tools, as well as varied pricing structures
and engagement models. The service model must have
a customized design that is highly flexible and comes
at a low cost. To deliver various levels of service, an
advisor should be aligned with partners that possess
expertise and visionary insight on these topics, as well as
a commitment to remain ahead of the curve.
Children of Clients
A typical advisor, regardless of their age or length of
practice, most likely has clients in the boomer realm. It
is important that they also start building a relationship
with the children of their existing clients, because if they
fail to do so, the advisor may miss out on what is being
referred to as the biggest transfer of wealth in history.
Various industry data indicates as much as 80 percent
of those children will not stay with their parent’s advisor
when they inherit wealth1
. Some of this is service model
related and speaks to the opportunities just mentioned,
but much of it is due to a lack of relationship and trust
building.
Older Clients and Younger Advisors
Now, consider the million dollar question: Where are
the younger advisors coming from? Another question
that may come to mind: How is this segment of fiercely
independent advisors going to survive the upcoming
changes? While Cambridge doesn’t have all of the
answers, we do have a few strategies built around these
challenges.
First, as a broker-dealer we give our clients, the advisors,
the freedom to build their business the way they see
fit. Many competitor firms have established minimum
production criteria that by default reject the young
advisor – as most of them come into the system without
a book of business of their own; and therefore, don’t
meet those production requirements. Cambridge
supports its advisors if they desire to bring in a“new”
advisor. We encourage and guide these efforts through
our Cambridge continuity and succession programs.
Second, Cambridge has taken a step further and created
an advisor facing internship program called The Next
Step®. Through The Next Step® we strive to locate the
potential Next Gen advisor, inspire them to choose
a career within our industry, introduce them to our
successful offices across the country based on best
fit, and assist the advisor with implementation of the
program and training of the intern.
Female Investors
Another immediate opportunity within the investing
population is in regards to the amount of wealth that
women control – over 50 percent today, with projections
to grow to almost 70 percent by 20202
. The majority
of these women do not have a gender preference
when it comes to the advisor that they choose to work
with. Instead, and similar to the Next Gen segment,
women do have a preference for particular service and
engagement models, and investing is much more about
the“how”and not the“what”.
It is potentially more difficult for an advisor to adapt
an approach, based on the“how”, than if adjusting to
the“what”. It requires self-reflection and adaption of
communication style on the part of the advisors to
attract and retain women clients. Overall, the industry
has not focused on engaging the female investor that is
already a client, as part of a married couple. Sadly, over
70 percent of women plan to seek out other advisors
when their spouse passes away3
. This isn’t a growth
conversation, but a retention conversation similar to
that of retaining and engaging the children of clients.
The Emerging Investor
A 2013 Fidelity® study reflected that 61 percent of the
Gen X/Y group make their own financial decisions but
work with one or more financial advisors as sources
of information and a second opinion4
. A new service
model will need to accommodate the rising number of
investors looking to“co-pilot”with a financial advisor.
This model should offer education to the client, as well
as allow them to create and make their own decisions.
It is also important to enable them to validate those
concluding decisions face-to-face, because relationships
and trust are essential.
Developing a change strategy will enable the advisor to
successfully adapt to the generational shift, and could
potentially bridge the gap between demographics. In
developing a change strategy, an advisor must first ask
themselves some important questions:
1. What do I need to do to develop my skills and
expertise to prepare myself to be relevant in the
future, specifically for the Next Gen or female
investors?
2. What changes do I need to make as the world moves
from an environment where technological tools
are used complementary to the service model and
relationship, to an interconnected world where
technology is simultaneous and expected?

4. 3. Who can I partner with that is already thinking
about these issues and has resources that I can take
advantage of now for my business as I prepare?
Amy Webber, President
With over 25 years of experience, Amy Webber’s
commitment to independent rep-advisors is
demonstrated in her passion for delivering high level,
personal service and leading management solutions.
Her personal interest lies with continually refining the
independent broker-dealer model to best support the
next generation of independent advisors – including
creating innovative programs such as the Cambridge
Source outsourcing program and the Cambridge Next
Step® internship program. Webber serves as a Director
for the 2014 Financial Services Institute Board (FSI), an
advocacy organization for independent broker-dealers
and their affiliated independent financial advisors. In
2012 and 2014, Webber was recognized as a member
of the IA 25 by Investment Advisor magazine and in
2011, 2010, and 2009 as one of the Top 50 in wealth
management by Wealth Manager.
Jeff Vivacqua, Senior Vice President
Business Strategy
With nearly 20 years of industry experience, Jeff
Vivacqua has an active role in managing strategic
issues for Cambridge Investment Research that affect
rep-advisors including marketing, sales, operations,
business development, and technology and is also
responsible for developing strategic initiatives for
Continuity Partners Group that address continuity,
succession, and acquisition needs for today’s
independent rep-advisors. He brings prior experience
in advisor-based solutions from his leadership roles
at Mutual Service Corporation (LPL), the AIG Advisor
Group, SunAmerica Securities, and Charles Schwab.
Vivacqua earned a BS in finance from Southern Illinois
University and has certificates in Personal Financial
Planning and Facilitative Leadership Training programs.
He holds FINRA Series 4, 7, 24, 63, 66, and 79 licenses
and is a member of the Financial Services Institute (FSI).
About Cambridge
Cambridge Investment Research, Inc. (Cambridge),
member FINRA/SIPC, is among the largest independent,
privately owned broker-dealers in the U.S. with more
than 2,500 independent registered representatives
and over $65 billion assets under management.
www.joincambridge.com.
Follow Cambridge:
Reprinted by permission for specific use in 2015 by The 401K Study Group.
1
(2014). Women advisors forum. OnWallStreet, 24(1), 16.
2
Kogen, L. (2013). Engaging women: It’s a business issue, not a gender issue.
Financial Planning.
3
Ackerman, R. (2012). Women & investing: Why many advisers are missing
out. InvestmentNews.
4
(2013). 2013 Fidelity® millionaire outlook executive summary: Gen X/Y
millionaires not sitting idle. Fidelity®, 7.
The information discussed herein is general in nature and provided for
informational purposes only. There is no guarantee as to its accuracy or
completeness. Nothing in this white paper constitutes an offer to sell or a
solicitation of any offer to buy any type of securities. Reprinted by permission for
use by Cambridge. All rights reserved.
Securities offered through Cambridge Investment Research, Inc., a
broker-dealer, member FINRA/SIPC, and investment advisory services offered
through Cambridge Investment Research Advisors, Inc., a Registered Investment
Adviser. Both are wholly-owned subsidiaries of Cambridge Investment Group, Inc.
For broker-dealer use only V.CIR.0115

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Selective advisors choose Cambridge. Contact us at (TheFeeExperts@cir2.com) at 877-688-2369.
Cambridge Investment Research, Inc. | 1776 Pleasant Plain Road | Fairfield, Iowa 52556
877-688-2369 | www.joincambridge.com
Reprinted by permission for specific use in 2015 by The 401K Study Group.