VettaFi Advisor Perspectives: Prepare to Meet the New Generation of Clients

VettaFi Advisor Perspectives: Prepare to Meet the New Generation of Clients

In his latest byline, featured in Advisor Perspectives, Seeds’ CEO Zach Conway explains how advisors are missing the boat by preparing for a next generation of investors that is already here.
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Many of us who have been in the wealth management profession for a while will admit to fixating on supposed trends. (Remember the furor over robo-advisors replacing human advisors or the looming retirement crisis?) These specters of change failing to manifest – or at least taking longer to do so than originally believed – has desensitized us to the headlines. As a result, we default to downplaying whatever we’re told is coming next.

I am concerned the same is true of another much-hyped conversation surrounding next-generation investors.

While the profession has been endlessly pontificating about how best to attract and serve that next generation, they have already arrived. The descriptor “next” implies that this group of investors has yet to materialize. That isn’t true. Instead, this group of investors – including millennials, people of color, women, first-generation immigrants and other historically underserved communities – have already emerged as the “new generation” that advisors must adapt to serve. They’re here, they have money to invest, and they want help navigating an ever-more-complex financial world. If advisors continue to think of these clients as something that comes “next,” the sense of urgency to adapt their practices and meet the needs of these new investors today vanishes.

Many advisors are woefully behind the curve: According to new research from Fidelity, just one in five has an asset-weighted client age under 60. The average firm derives an overwhelming majority of its revenue from older clients, yet advisors have initiated contact with just 13% of their clients’ children. Meanwhile, despite women’s burgeoning share of the wealth pie, financial professionals are missing out on a $14 billion opportunity to serve them via segment-specific experiences, appropriately tailored enablement programs, and targeted products and services.

Advisors can’t be this complacent.

Those advisors with an average client age of 69 are growing just 1% year over year, according to the Fidelity research, and 78% of the existing assets are at risk. Meanwhile, competition is fiercer than ever, and the creeping commoditization of investing means that advisors must reevaluate their value propositions to survive and thrive. Millennial and Gen Z investors, women and minorities have quite different needs from those of the “traditional” client set. Many grew up in a different era, shaped by transformative technologies and pivotal world events, and their personal experiences have informed their expectations for financial advice.

A great wealth transfer is not just imminent, it’s already underway – and millennials, Gen Z and women are among those poised to be on the receiving end. Advisors need to think about the now and the new, not the next, and step up their offerings in key areas.


The ability to offer personalized, tech-enabled experiences that address the unique needs of diverse clients will define advisors’ success. As digital natives, new-gen clients will demand the convenience of technology that offers seamless onboarding, multiple modes of digital communication, and instant mobile access to their financial plans. Moreover, these clients expect interactions and financial road maps that are tailored to their unique values, circumstances and goals. In fact, a significant number see the latter capability as one of the most important ways an advisor can impart value.

To that end, advisors would do well to deploy behavioral tools and technologies that help them get to the heart of – and better serve – their clients’ motivations and desires. Once they understand what makes their client tick, they will be better positioned to deliver thoughtful, personalized recommendations that resonate.

Values alignment

The new generation of investors tends to lead with their values. When it comes to their investments, millennials and Gen Zers are more than twice as likely as baby boomers to prize values alignment when investing. Cerulli found that women are more inclined than men to invest in companies that have a positive social or environmental impact. Meanwhile, Schwab research indicates that Black investors are particularly enthused by the possibility of aligning their investments with their personal beliefs.

Why are advisors drastically underestimating or ignoring the demand for values-aligned offerings?

It may be that some are waiting for their clients to initiate the conversation, in which case they risk losing out to the advisor who proactively broaches the topic of environmental, social and governance (ESG) investing. Others may be justifiably concerned that, despite their best intentions, they’ll inadvertently engage in greenwashing and undermine the client’s trust. But it doesn’t have to be this way – in recent years, a crop of platforms has emerged to help address advisors’ ESG challenges head on. Many offer educational materials and conversation starters to support advisors in confidently uncovering their clients’ values, subsequently translating them into custom allocations that offer greater control and transparency than one-size-fits-all strategies.

Why are advisors drastically underestimating or ignoring the demand for values-aligned offerings?

View the article here.