Right on target

As the ageing population grows, so does the potential client base for advisers that fall into the over 50 age group. An increasing number of people do not have adequate savings or a satisfactory pension to see them through their later years. This means having the right protection in place is of utmost importance to people heading towards retirement.

Although this is a growing market that has a real need for financial advice, the way in which it responds to marketing differs from other client groups. If you want to increase the number of people in the over 50 bracket on your client database, it is important to understand how to communicate with this age group.

Building trust

A recent report by Datamonitor reveals financial service providers are ignoring older customers and failing to market products effectively. The report, Marketing Financial Services to the Over 50s, reveals that of all the key motivations behind the choice of provider, trust is the most important factor influencing this age group. It recommends that providers should concentrate on building better customer relations in this market.

Effective marketing begins with understanding what makes your target market tick.

And according to Helen Smith, Datamonitor financial services analyst and author of the report, financial service providers are missing out on a profitable market due to poor communication.

'For many people, turning 50 represents a new lifestage in itself. It is often a period of prosperity as mortgages are paid off and children leave home,' she says.

'It is also a time of intense planning for retirement. Retirement itself brings changes, as consumers seek to maintain and maximise their personal income. In spite of this, and the fact the over 50s account for a growing proportion of the population, few financial services companies actively target this segment. Those that do say it is a difficult group to market to effectively,' she continues.

Personal touch

So how does this translate to advisers? When it comes to product distribution, the report clearly states the over 50s prefer to have face-to-face contact when purchasing financial products.

Although older people are now comfortable purchasing less complex products, such as general insurance, through remote channels, when it comes to more complicated investment and protection products, IFAs are cited as the preferred choice. This relates to the fact that clients value trust. If advisers are to be successful working with this age group, establishing a bond with clients is vital.

The report finds that over 50s are more likely than the average population to choose providers on the basis of recommendation, their own previous experience of the company and the friendliness and helpfulness of the staff. If the same motivations apply when choosing an adviser then it is important to make a good impression from the start.

Providers that initiate loyalty schemes are also better received by older customers, so advisers could use the same concept. Making people aware of the benefits of keeping their business with you is key. Service needs to be personal and regular communication including reviews of your client's circumstances and protection options as their needs change can form the basis of a long-term relationship, providing ideal conditions to build trust and loyalty.

Datamonitor's report recognises few financial service providers actively target the over 50s. There are exceptions to the rule. Saga Financial Services and Age Concern Financial Partnership are two providers which specialise in this area of the market.

However, as revealed in the report, older people tend to be traditional in their choice of provider. As they value loyalty, customers tend to opt for names they recognise and unless all providers take the same attitude as the few specialist ones which target this age group, communication will continue to be marred and sales of protection products may, in turn, fail to increase.

As few providers seem to recognise the importance of marketing to this group, it is up to advisers to fill the gap. By actively targeting over 50s, advisers should be able increase protection sales and build a loyal relationship with their clients.

Kirstie Redford is editor