The 2017 Fidelity Millionaire Outlook Study finds what Gen X/Y millionaires want:
- Grow my money: Gen X/Y Millionaires Expect Investment Returns of 16% (vs. 7% for Boomers+)
- Plan my whole life: 62% of Gen X/Y Millionaires Want Their Financial Advisor to Provide More Comprehensive Services (vs. 25% of Boomers+)
- Give me access to my financial info: 53% of Gen X/Y Millionaires Said They Would Find a New Advisor if Theirs Wasn't Using Technology (vs. 29% of Boomers+)
BOSTON — Fidelity Investments® released the results of its 9th Millionaire Outlook study today, which shows that the face of wealth is changing and is beginning to "tip" to Gen X and Millennials (Gen Y).2 Gen X/Y millionaires are at an inflection point due to their age and the complexity of their financial situations, and they look much different than older generations of millionaires do:
And the differences don't end there: the Fidelity Millionaire Outlook study found that Gen X/Y millionaires take a much different approach to money than Boomers:
With the ranks of Gen X/Y millionaires growing fast (they were 8% of millionaires in 2012 and are now 18%7) and the fact that only 58% of them are currently working with a financial advisor (down from 72% five years ago), they represent both an opportunity and a risk for the wealth management industry. By 2030, Gen X/Y will surpass Baby Boomers in terms of holding the most wealth in the country.8
"With the percentage of Gen X/Y millionaires using an advisor on the decline, the industry needs to take a step back and ask: What can we be doing to 'tip' these investors toward valuing advice?" said David Canter, head of the registered investment advisor segment at Fidelity Clearing & Custody Solutions. "Gen X and Millennials don't manage their finances in the same way that their parents did—they want an advisor who will be their own personal CFO and organize and simplify their financial lives."
Key Takeaways for Advisors:
- Sixty-nine% of Gen X/Y millionaires have referred at least one person to their advisor in the past year (vs. 48% of Boomers), so consider gathering feedback on your approach via client satisfaction surveys and advisory boards so that you can tailor your services to this market.
- Examine your book of business to see if you've established relationships with your current clients' children in the Gen X/Y population. 49% are likely or very likely to meet with their parents' advisor if recommended, but only 16% of financial advisors are actively targeting younger investors.9
- Make sure you're providing online access to statements, reports and, financial records via your website, an online portal, and/or an app, and staying on top of the latest ways to enhance the client experience through technology.
- Given that Gen X/Y millionaires are looking for more than just investment advice, consider taking steps to go beyond money management and offer comprehensive services, for example, outlining how you can help them stick to a financial plan and reach their goals.
- Gen X/Y prefers to consolidate assets with one advisor. Use data aggregation tools to find outside assets, and bring up the ease of one-stop shopping in conversations.
For more details on the study and to access Fidelity's new report, The Tipping Point: Will the Coming Wave of Wealth Value Advice, visit go.fidelity.com/millionaireoutlook2017.
About the Fidelity Millionaire Outlook Study
The 2017 Fidelity® Millionaire Outlook Study was an online, blind study conducted during the period January 18 through February 13, 2017. The sample was provided by TNS, a third-party research firm not affiliated with Fidelity. The study focused on understanding affluent investors' attitudes, goals, behaviors and preferences related to investing, wealth management, and advice. Six hundred and one participants were defined as "Millionaires" with $1 million or more in total investable assets, excluding 401(k) and real estate investments.
About Fidelity Investments
Fidelity's mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.4 trillion, including managed assets of $2.3 trillion as of August 31, 2017, we focus on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients' money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.