Your most important clients might be younger than you think. According to a recent study conducted by Charles Schwab, high net worth investors aged 30 to 45 represent one of the most significant growth opportunities for RIAs in the next decade.
To find how they view the world, which Schwab has dubbed Generation Now to reflect the immediate opportunity this group represents for independent advisors, let’s look at the highlights from the study.
How do they feel?
Generation Now investors control $3.5 trillion in investable assets, and their lives have been shaped by global uncertainty and instability. Just think for a moment of the global headlines that have shaped their lives – the Tech Bubble burst in 2000, 9/11, Enron, the Iraq War, the Great Recession, Financial bailouts, Bernie Madoff, the BP oil spill, crises in Syria and Ukraine and the current spate of violence here at home – it is no wonder that they feel anxious, cautious and distrustful.
Anxious – worry and doubt dominate their thinking. Generation Now feels the economy, employment, home values, health care and Social Security are unstable. They struggle with how to balance investing for the future while providing for today and wonder how they to best care for their children and aging parents.
Cautious – hedging against personal or financial upheaval is top of mind. They constantly monitor investments and assess life achievements keeping a high percentage of savings in cash. Generation Now investors also live on a budget – even millionaires.
Distrustful – They are skeptical of the market and financial institutions and doubtful of traditional buy and hold strategies. Generation Now trust family, friends, colleagues – even themselves – over experts and may prefer secure returns over big market wins.
What do they value?
It should be no surprise that Generation Now investors value financial freedom and do not view this as a number, but true peace of mind.
Financial Freedom – Generation Now wants to cover expenses confidently, but without budgeting and monitoring. They also want to preserve their socioeconomic status and family legacy and want to feel prepared to meet unexpected situations – from medical bills to stock market swings.
Balance – if there is one thing Generation Now is in search of it is equilibrium. They want to prioritize family over wealth accumulation and invest in life experience over material things. They want to give back to their communities through donating time and grow their assets while safeguarding the wealth they have already accumulated.
What do they want?
Generation Now investors are looking for a partner they can trust, someone who knows them as individuals. To connect with this group, advisors must:
- Understand that collaboration is key to success
- Know their values – not just their financial goals
- Let them get to know you as a person
- Give them control over decisions that impact the future
- Be available
- Demonstrate deep financial expertise
- Partner with other professionals for broad financial planning solutions
Paul Alegi, CRC, is a wealth advisor and the head of institutional sales for Guardian Wealth Strategies.
Paul Alegi is a Financial Advisor, Vice President for Merrill Lynch Wealth Management.
