How Financial Advisors Can Better Serve Underserved Populations

August 17, 2021

Many financial advisors focus on serving older professionals approaching retirement or those with a high net worth, but there’s an entire spectrum of clients who also could benefit from financial advice.

Building an early relationship with these groups could help you expand your client base, grow your business and provide much-needed financial guidance to underserved populations.

Underserved Groups Who Need Financial Advice

Several populations could be better served by financial advisors, including millennials, women and low- and middle-income professionals. Here, we dive into these groups and their potential need for wealth management support.

Millennials

Millennials are no longer the fledglings of the labor force. In fact, this demographic makes up the largest segment of the workforce, which means their earning potential is strong. Most millennials have been in the working world longer than 10 years — and some upwards of 20 years — meaning they have had the opportunity to advance their careers and start and grow their own businesses. Despite this, recent data shows more than 40% of millennials aren’t investing at all, and nearly 50% are waiting until they earn more money to start investing.

For financial advisors, this represents a prime opportunity to tap into a large segment of potential investors who, with many years of employment still on the horizon, could use professional advice for how to save, budget and invest their money. Plus, their needs will continue to change as they get older, grow their families and evolve their careers, presenting more opportunities to serve them with different financial products and services that can meet their evolving needs throughout the different stages of their financial lives.

Women

Financial advisors also could better serve women. Previous research indicates nearly 50% of women have negative views about financial planning. They also are less involved in long-term financial decisions and have fewer retirement savings than their male counterparts. However, more women are the breadwinners in their families today. They also are more likely to live longer than their husbands or male partners, which means this group could benefit significantly from long-term financial planning.

The 2020 Women in Financial Services Report found that financial advisors are leaving $700 billion a year in revenue on the table by not meeting women’s comprehensive financial needs. Offering financial guidance that can help women throughout their financial journey is not only good service, it’s also good business sense.

Middle- and Low-income Professionals

All too often the industry focuses on six-figure and high-net worth individuals because they have more assets. However, middle- and low-income populations also could benefit from working with a financial advisor.

Research shows more than half of adults (52%) live in middle-income households and roughly one-third (29%) live in low-income households, representing more than 80% of the total U.S. adult population. These groups have distinct financial needs, whether it’s life insurance, saving for retirement or general investing to establish savings.

Middle- and low-income populations are more likely to work in trades or in fields that require varied availability, so offering flexible scheduling and virtual meeting options is a great way to improve access to financial planning for low-income earners. Financial planning for low-income clients may also include improving access to information about saving and investing. Think of accessible ways to provide information to these groups, such as on a website or via social media, to extend your reach to these underserved populations.

Sometimes, the people who need financial guidance the most are the ones who are the least likely to receive it. As a financial advisor, you can focus on a specific niche and only choose to work with certain clients. However, you can grow your business by expanding the customer segments you serve and establish mutually beneficial and lasting, long-term relationships.

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