Get to know your future clients

Home
What we do

Technology
Powering the future of wealth with enterprise platform solutions that address complex business challenges.

Operations
Achieving operational excellence with business process outsourcing and data management that help clients improve efficiency and performance.

Asset management
Connecting investors to what matters most, so they can achieve their goals and make confident decisions.

Featured
Who we serve

RIAs and financial advisors

Wealth and asset managers

Banks and broker-dealer advisors

Institutional investors

Families and individuals

Featured
Insights

Insights
Perspectives and happenings from our leaders and experts

Newsroom
The latest news and announcements

Featured
Investor relations

Overview
The latest financial information for shareholders

Events and webcasts
Timely shareholder announcements and event information

Governance

Reports and filings

Stock information

Board diversity matrix

Featured
About us

Our story
Who we are, what we do, and how we do it.

Our commitment
Building brave futures through the power of connection.

Our leadership team

Newsroom

Locations

Careers

September 6, 2022

4 MIN READ

In my last blog, I shared how to grow from the inside out using a three-step process that focuses on understanding and connecting with the people who matter most to your clients, such as their children and grandchildren.

Why is it so important to create these extended connections? Because we're at the beginning of a great wealth transfer. In 2018, Cerulli reported that $68 trillion would transition to younger generations over the next 20 years.

In fact, the transfer is happening right now. From Q4 2017 to Q4 2021, the share of U.S. household wealth by Generation X and millennials has increased by 9%, while the baby boomers' and silent generations' shares of wealth have decreased by 12%.

A generational transfer of wealth isn’t a problem; it’s expected. The issue that you should care about is that as assets pass from parent to child or grandchild, those assets often don’t stay with the advisor.

According to a Cerulli report, only 13% of the children of affluent investors stay with their financial advisor. I expect this phenomenon to especially be true with high-net-worth and ultra-high-net-worth investors, particularly business owners, who are driving a lot of the wealth that is set to be transferred.

What do Gen X and millennial investors expect from their financial advisors?

As you consider how you serve your future ideal clients, it might be helpful to provide some insight on what Gen X and millennial investors want and how they think about their finances. Keep these points in mind as you look to connect with your clients’ children. What do they need and want from a financial advisor? What do they expect? And, what keeps them up at night?

Note that the oldest Gen X generation is in pre-retirement range now.

	Gen X	Millennials
Birth year	1965-1980	1981-1996
Age range	42-57	26-41
Advice preferences	65% report using an advisor¹ Consider an independent financial planner, brokerage advisor, and investment manager primary advisor¹	82% report using a financial advisor¹ Consider a banker or accountant primary advisor¹ Prefer working with a financial professional or combination of in-person and automated. They trust their advisor and themselves²
Investments	Modest return expectations, at least 2% above the market average³	More aggressive return expectations, 16.3% above inflation² Interested in sustainable investing but also want returns and more information² Interested in new types of investments such as cryptocurrencies, NFTs, and meme investing²
Financial planning	They expect it all, especially retirement and tax planning² Worried about retirement security due to inflation, public debt, reduced public benefits and job security²	They expect it all too and want their investments to have a larger impact (78%)² Worried about retirement security due to inflation, public debt, reduced public benefits and job security²
Good to know	Most indebted and highest earning generation² Almost 2x more stressed about finances than Boomers (Allianz Life) - juggling work, children, and aging parents² Household makes shared/joint financial decision making² Prefer using apps and digital communications (i.e. text, email, virtual meetings) for investment and planning communications, but both prefer phone calls for general, advice-based questions. Text is outpacing email, especially for millennials²	They are savers (average 17% of income)² Performance vs. the markets > meeting goals² 24% trust social media when making investment decisions² Value help avoiding emotional decisions² Household makes shared/joint financial decision making² Prefer using apps and digital communications (i.e. text, email, virtual meetings) for investment and planning communications, but both prefer phone calls for general, advice-based questions. Text is outpacing email, especially for millennials²

Take steps to connect with future wealth holders

If you want to take action to prepare and adapt for your future ideal client, use the ideal client persona toolkit to create an accurate persona for yourself, and a service model to deliver relevant value consistently.

Sources:

¹“Gen X Investors: The Pressure is On” Spectrem Group, spectrem.com.

²“2021 Global Survey of Individual Investors,” Natixis Investment Managers, im.natixis.com, 2022, n=8,550 investor respondents from 22 countries.

³“Millennial and Generation X Investors,” Spectrum Group, spectrem.com, 2018, n=400 respondents.