Financial advisors on Wall Street are maintaining client confidence, but must change tactics in order to attract the next generation of investors, according to Sally Krawcheck, former president of investment management at Bank of America.

Speaking at the 2011 SIFMA annual meeting in New York City, Krawcheck said that financial advisors are doing well with client retention, despite a weak economy.

"Sitting here today, clients continue to like, trust and admire their financial advisors," Krawcheck said in a conversation with moderator and journalist Charlie Rose.

Krawcheck related her own research and observations, which has shown that consumer confidence in their financial advisor is "in spitting distance" of what it was in 2007.  In fact, Krawcheck said that the economic decline reinforced feelings of trust. She said that clients tend to be satisfied with their individual advisors--which help banks retain customers--but that many clients are unhappy with the financial institutions.

"With that being said, our industry has some long term challenges and immediate term challenges," Krawcheck said, pointing out that Wall Street, among other things, isn't preparing itself for the next generation.  

This poses a big challenge for brokerage firms, whose clients are in their mid-to-late 60s. More than a decade ago, that number was closer to 50 years old, according to Krawcheck. And she said attracting younger investors is challenging in the face of Occupy Wall Street and overall dissatisfaction with Wall Street.

"Everything [younger generations] have heard in the press is that ‘you don't want to be in the markets. You don't want to trust these guys'", she said.  She said one solution is for Wall Street institutions to prove their value to younger generations.

"Typically, we don't do ourselves any favors," she said. "We tend to talk about stock market returns," she said. "We're not talking about [financial] planning, we're not talking about full asset allocation, and we're not talking about liquidity management." 

In contrasting younger and older generations, Krawcheck highlighted that older investors place investment performance returns about eight on the list of priorities, behind planning, returning phone calls and a feeling of being heard and responded to by their financial advisor.

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