Updated on: April 30, 2024

In the spring of 2021 Fidelity conducted its annual Investor Insights Study which screened nearly 2,000 investors across a wide range of ages, incomes, and investible asset levels to learn more about what they are looking for when it comes to a relationship with a financial professional.¹

Not surprisingly, the type of advisor relationship desired showed a divide between older and younger generations, most notably between Baby Boomers and those in Generations X, Y, and Z. Younger generations had vastly different preferences and expectations from their advisors.

Many of these investors are already your clients. After all, Gen X includes anyone born between 1965 and 1980, and Gen Y—also known as Millennials—is now the largest generation of employees in the workplace. This means they are already a part of your firm’s future. To ensure they, and younger generations behind them, continue to be a part of that future depends on how much attention you pay to what they are looking for in a financial planning relationship.

How Gens XYZ View Financial Wellness

One of the most striking differences the study uncovered is that these younger investors don’t want help with investing, but they do enjoy working with financial advisors.

So, what does this mean? They want your assistance with services outside the realm of traditional investing—they want advice that will help them reach their financial wellness goals.

The overarching goal of financial wellness is to have feelings of satisfaction and peace of mind throughout one’s lifetime. Financial professionals who offer a broader base of services related to financial wellness appeal to generations who view money as more than a means to an end.

This desire for a broader level of service was also borne out in the eMoney Power to the Plan research.² This study showed that many financial professionals are already speaking with their clients about the issues they think are important around total wellness, including their extended family situation, physical health, personality traits, and mental health. And younger generations welcome this level of support.

Defining Broad-based Services

Of course, every client is unique and what they want from their relationship with their financial professional will vary, but there are some specific areas of focus to consider that will resonate with younger generations to help secure the future of your firm.

Guidance on Debt

These generations have higher levels of debt than the Baby Boomers. However, the kind of debt varies from mortgages to credit cards to student loans. Develop an understanding of best practices when it comes to addressing each of these types of debt. Clients crave education to help them resolve their debt issues and make smart choices regarding debt going forward.

Complex Family Needs

No two families are alike and that is more true than ever. There are so many more family models in our world today than those that existed in the mid-20th century. Introducing money management into these unique relationships may exacerbate already complex situations.

Today’s financial professionals need to be comfortable talking about emotions, difficult life events, and these complex family structures—as well as providing financial planning advice that supports the diverse needs and goals of these families.

Values-based Financial Planning

Generations XYZ want their financial professional to help them invest with their values in mind and contribute to causes important to them, so they are at peace with their place in the world.

They are looking for more than just the financial returns they would receive by putting their money into companies that go against their personal values or that aren’t good corporate citizens. Be sure you can provide clients with this healthy peace of mind by consistently asking about the causes and issues that are important to them.

Achieving Personal Fulfillment

Money touches almost every aspect of our lives. It is intricately bound to our overall health and well-being—including our feeling of personal fulfillment. Fidelity introduced the Advice Value Stack® to measure the changing perceptions of the financial advice industry.

Fidelity’s Investor Insights study showed that 14 percent of Baby Boomers said peace of mind was important and 8 percent said fulfillment was important. In contrast, 20 percent of Gens XYZ said peace of mind was important and 17 percent said fulfillment was important.¹

Practices Supported by Technology

Interestingly, much of what’s driving younger generations to seek a relationship with a financial professional revolves around technology and the digital world we are living in.¹

For example, they like that technology has allowed them to work with financial planners outside their local area and that having a paperless environment makes for a smoother onboarding process.

The study found that Gens XYZ look at online reviews to learn more about their financial professionals and that they are also influenced by social media profiles. And although the formal number of meetings they have with their financial planner may have been the same as older generations, younger generations interact more often through digital channels.

Future-proof Your Financial Planning Practice

Of the options available to ensure the longevity and success of your financial planning practice into the future, a focus on client well-being seems to resonate the most with younger generations. The issues that are important for these investors should be top of mind for any financial professional looking to grow their business.

In its Planning with Purpose research,³ eMoney also found that financial firms that view financial wellness as important and incorporate it into their day-to-day operations saw larger rates of satisfaction, personal fulfillment, and fulfilling purpose in their staff—especially when those firms support their practice using technology. And these firms’ growth in clients and in assets under management indicates that these practices are resonating with their clients as well.

The future of your financial planning practice depends on your ability to have frank conversations with your clients and prospects about their wishes, dreams, and purpose in life. Financial wellness, literacy, and education are multi-faceted topics but absolutely essential in connecting with younger generations.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.

Sources:

¹ 2021 Fidelity Investor Insights Study, June 2021, Investors n= 1,974, including 773 millionaires

² eMoney Power to the Plan Research, July 2020, Advisors n=420, End clients n=403

³ eMoney Planning with Purpose Research, July 2021, Advisors n=393, End clients n=391

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