8/10/2023 0 Comments Fieldity mymoney fieldty tool![]() The number of assets at risk of wealth transfer also increases with the average age of a firm’s clients. Firms with an asset-weighted client age less than 62 had an average organic growth rate of 10% compared to a 1% average organic growth rate for firms with an asset-weighted client age of 69 or older. Fidelity research shows that organic growth is negatively impacted as a firm’s set of clients ages, and potential buyers are likely to pay a premium for firms with younger client bases. Eighty-five percent would like some form of behavioral coaching from their advisors to help them avoid making mistakes, procrastinating, or making rash decisions, yet advisors have reached out to only 13% of clients’ children, and only one in five advisors have an asset-weighted client age under 60 years old vi.Ī firm’s overall health and valuation can also be put at risk by not engaging younger investors. Nearly three-quarters (73%) of Gen YZ investors say they put a lot of pressure on themselves to constantly improve their financial situation and, in Q3 2022, young investors between the ages of 18-35 opened nearly half (45%) of all new Fidelity retail accounts – the highest percentage from this group since Q1 2021 v.ĭespite young investors’ interest in their finances, advisors are not capitalizing on opportunities to engage them. Young investors’ lived experiences, including the Great Recession and COVID-19 pandemic, motivate them to improve their financial standing. The Business Imperative for Young Investors We want to help firms evolve their practices and empower them to embrace the growth opportunity that these next generation investors provide.” “Advisors who don’t adapt to this shift also risk the overall longevity and valuation of their firm. “Our industry is approaching a transfer of wealth tipping point as younger investors look for an advice model that is different from what worked for their parents and grandparents,” said Anand Sekhar, vice president of Practice Management & Consulting at Fidelity Institutional. This is the latest example of Fidelity’s commitment to meeting the financial needs of the next generation of investors, while also offering wealth management firms the products, insights, and technology they to attract young investors. To help wealth management firms and independent advisors better understand and engage this client segment, Fidelity created a Young Investor Toolkit that includes a mix of self-serve and consultative resources. With 57% of existing client assets expected to pass to the next generation by 2045, this presents a significant growth opportunity for financial advisors – and potential looming business vulnerability for those who do not prioritize engaging with this group, as firms with a younger client base are growing nearly 10 times faster than their peers iv. ![]() New research from Fidelity Investments ® shows that 63% of Gen YZ iii investors believe working with an advisor is key to achieving financial success and 60% feel a heightened need to engage a financial advisor this year due to economic uncertainty. BOSTON-( BUSINESS WIRE)-Contrary to industry stereotypes, young investors can be attractive clients for wealth management firms.
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