7 Keys to Attracting Gen Xers and Millennials to Your Practice
What would you like to know
- By 2030, Generation X and Y households will control 47% of the wealth in the United States, compared to 45% of baby boomers.
- Firms in the top quartile of revenue growth have more younger investors among their clients.
- This group prefers a financial coach to a financial planner.
Baby boomers have been the primary clientele of financial advisers for years, but a practice needs new blood to continue to grow. Since Gen X and Millennials will control 47% of America’s wealth by 2030, advisors need to understand how to attract this younger group and scale their businesses accordingly.
And the wealth of the younger generations will only increase as they will inherit a “significant share of the $ 24 trillion expected to be passed on over the next decade,” according to the report. a new study by T. Rowe Price which explores the attitudes of the next generation towards financial planning – and planners. “In fact, the next generation will overtake the baby boomer legacies in just three years.”
Additionally, the companies with the strongest revenue growth had the highest percentage of customers under 55 (the oldest Gen X are 56 this year). The study found that 37% of customers of companies in the top quartile of revenue growth were in this age group. Only 12% of business customers in the bottom quartile were 55 or younger.
The quantitative and qualitative study looked at the richest 10% aged 25 to 49, oversampling various demographics, with $ 100,000 to $ 1 million in investable assets, compared to those over 50 years with over $ 1 million in investable assets. The study also examines subsets of these groups.
The Pew Research Center defines Generation X as Americans born from 1965 to 1980 and Millennials as those born from 1981 to 1996.
“ An old white dude on a golf course ”
Millennials and Millennials have some take on counselors, the study found, stating that they’re usually “an old white man on a golf course” or “they’re talking to people who have a sum of money. magic money. “
Here are seven findings on younger generations and the steps advisors can take to make their business more profitable.
1. Next Wave investors don’t believe they are doing well – or that advisors want their business.
They don’t see themselves as “rich,” so they don’t believe an advisor is interested in them, the study found. In addition, they are not about “an overabundance” of retirement messages.
The youngest of these investors, those born after 1980, have what T. Rowe Price calls a “state of mind of scarcity.” They have experienced two major recessions, one war and now a global pandemic without the ‘prosperity’ of the ’80s and’ 90s as adults.
This had a big impact on their investments, the study notes: They save more, they are more conservative and risk averse than older investors and have a negative feeling about their current situation. Most don’t feel rich enough to afford an advisor.