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SPOTLIGHT
Insights to help you serve young investors
Our latest content can show you how Generations Y and Z can help your firm grow, and what you can do to win their business.
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Ignoring young investors could put your firm's longevity at risk
Many financial advisors are skeptical about serving young investors because they don't think they can afford financial advice or be served profitably in the short term. However, a dearth of young clients may impact the value of your firm today, and the long-term sustainability of your business.
Baby Boomer and Silent Generation+ represent
87%
of households
95%
of revenue for a typical firm
Source: FI Practice Management & Consulting Client Insight Tool, 2022.
Young investors will soon represent a preponderance of the population and wealth
Contrary to the beliefs of many advisors, young investors can be attractive and profitable clients, especially over time. They value and are willing to pay for the advice of professionals, are motivated to improve their finances, prefer to consolidate assets with a primary advisor, and are loyal clients. They also are at ages when they first start to establish a financial advice relationship.
Gen Y and Gen Z now represent 42% of the U.S. population,1 but only 14% of advisory clients.2
They already inherit an estimated $541B each year (30% of the wealth transferred annually today).3
63% of Gen Y/Z
believe a professional financial advisor is important to financial success⁴ compared to 56% of Baby Boomers+.
66% of Gen Y/Z
want to consolidate more assets with primary financial advisors⁴ compared to 19% of Baby Boomers+.
74% of 30–39 year olds
are willing to pay for advice compared to 50% of 70+ year olds⁵.
Gen Y and Gen Z are redefining the advice model
Millennials and Gen Zers are leaning into their finances and redefining what is valued in an advice relationship. They engage with their money, seek whole-life advice, value an accountability partner, want to achieve financial freedom and gain access to new investments. They don't necessarily want or need the more traditional advice model that many baby boomers prefer.
85% of Gen Y/Z
would like some form of behavioral coaching from their advisors to keep them from making mistakes, procrastinating, or making rash decisions.4
75% of Gen Y/Z say
“I plan to save as much as possible now so I can become financially independent as early as possible and focus on what I really want to do in life” versus 57% of Baby Boomer+ (who are not retired).5
78% of Millennials
say they are “always looking for new investment ideas”.5
Start winning their business
The opportunity for advisors is to get educated now and begin making strategic adjustments to serve the next generation well and profitably. As is the case with long-term investing, the key is starting early to reap the benefits over time. Will you be the advisor they turn to? To get started, consider this three-step framework:
Foundation
Evolution
Innovation
It's time to change your mind about young investors
The Why: The ways that Gen Y & Gen Z can help grow your firm
The Who: The insights that can make you indispensable to them
The How: The steps you can take to start winning their business
Are you ready to serve the next generation of investors? We can help.
Fidelity's Practice Management and Consulting team can work with you to build strategies to help target, engage, and grow relationships with the right young investors.
RESEARCH
Meeting the moment: how smart advisors are winning young investors
Highlighting methods advisors are using to attract and engage Gen Y and Gen Z investors.
Related solutions to help you attract and retain young investors
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1. Brookings, “The Avenue: Now, more than half of Americans are millennials or younger,” July 30, 2020.2. Fidelity Investments, Analysis of ~3,700 on-platform firms (as of December 2021)
3. Cerulli Associates. U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2021
4. Fidelity Investments 2022 Investor Insights Study. Study was conducted during the period August 8 through September 2, 2022. It surveyed a total of 2,490 investors, including 673 millionaires and 1,520 investors with advisors. The study was conducted via an online survey, with the sample provided by Brookmark, a third-party firm not affiliated with Fidelity. Respondents were screened for a minimum level of $50K in investable assets (excluding retirement assets and primary residence), with additional quotas by age and affluence levels.
5. Cerulli Associates, U.S. Retail Investor Advice Relationships 2021
6. Cerulli Associates, U.S. Retail Investor Edition 3Q 2022, Issue #28
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