Strategies for Attracting Gen X/Y Clients Using Debt Management Tools
Explore key debt management strategies and the role of technology in attracting Gen X/Y clients looking to manage personal debt. Learn how to utilize tools like RightCapital to illustrate effective debt strategies and engage younger prospects. Discover debt reduction approaches such as Avalanche and Snowball methods, balancing debt repayment with retirement savings. Case study featuring the Bradys provides a practical example of applying these strategies in financial planning.
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Presentation Transcript
Attract Gen X/Y clients using debt management February 2017
Attract Gen X/Y clients using debt management Technology plays a bigger and bigger role for Gen X/Y consumers Many Gen X/Y consumers biggest immediate financial challenge is managing personal debt Free, publicly available tools (e.g. mint.com, personalcapital.com) allow clients to manage some of their own financial information like balance sheet and budgeting Debt management is an opportunity to provide differentiated advice for consumers along with those capabilities
Agenda Review key debt management strategies How to use RightCapital tools to illustrate debt strategies Using debt management + RightCapital Leads to bring in younger prospects
Review of debt reduction strategies Avalanche approach pay down highest interest rates first Pay the minimum each month to all debts except the one with the highest interest rate Allocate remaining $$ to the debt with the highest rate Mathematically, the quickest approach to getting debts fully paid off May not factor in emotional impact of keeping multiple debts on clients balance sheet Snowball approach pay down smallest balances first Pay the minimum each month to all debts except the one with the smallest balance Allocate remaining $$ to the debt with the lowest balance Creates psychological benefit of seeing reductions in the number of bills received Not the optimal approach mathematically Allocate additional money to paying down debt Balance between paying down debt and saving for retirement. Need to incorporate debt strategy into the holistic financial planning. RightCapital allows you to illustrate all three options
Case Study - Meet the Bradys Mike and Amanda: Current ages: Current debts: Married 31/29 Car loan: $15,000 at 5% Credit card: $15,500 at 11% Credit card: $13,000 at 17%
What are the Bradys options? Avalanche approach pay down highest interest rates first Pay the minimum each month to all debts except the one with the highest interest rate Allocate remaining $$ to the debt with the highest rate Mathematically, the quickest approach to getting debts fully paid off May not factor in emotional impact of keeping multiple debts on clients balance sheet Snowball approach pay down smallest balances first Pay the minimum each month to all debts except the one with the smallest balance Allocate remaining $$ to the debt with the lowest balance Creates psychological benefit of seeing reductions in the number of bills received Not the optimal approach mathematically Allocate additional money to paying down debt Balance between paying down debt and saving for retirement. Need to incorporate debt strategy into the holistic financial planning.
Illustrating the value of the Avalanche approach You can illustrate the total interest savings generated by the strategy as well as how much sooner the client will be debt free
Using debt management + RightCapital Leads to bring in younger prospects
Bring in prospects through RightCapital Leads Use digital marketing to promote your Leads portal create your free financial planning account for free
Create a connection using Debt Management When a prospect creates their account through the Leads program, the balance sheet and budgeting tools are immediately available. For Gen X/Y clients, you can immediately reach out to illustrate debt management options by enabling the debt management screen to demonstrate the value you can provide through advice and software Continue to engage clients by turning on additional planning capabilities such as investment review, college planning, and retirement planning.
