Many more Millennial millionaires say they expect their financial
adviser to initiate contact at least once a week compared with wealthy Boomers
and Gen Xers, according to Spectrem Group.
A new Spectrem Group report, “Effective Communication
Techniques,” breaks down affluent clients’ communication preferences by
generation, finding some surprising evidence about the preferences of
Millennial millionaires.
The analysis contends that the “traditional ways” in which
financial advisers communicate with their clientele may not be resonating with
wealthy Millennial investors—as nearly four in 10 Millennial millionaires (37%)
expect their adviser to initiate contact at least once a week. This is significantly
higher than the number of wealthy Gen X (3%) and Baby Boomers (3%) clients who
expect the same.
“Failing to grasp this trend may have real implications for
advisers, who are more likely to be fired for perceived lack of communication
than they are for lackluster results,” Spectrem researchers warn. “While this
seems like a simple concept, it grows increasingly difficult when an adviser
must manage expectations across multiple generations and levels of wealth, each
of whom have unique
preferences about how they want to be contacted and the frequency with
which it takes place.”
When it comes to client-initiated contact with advisers, returning
phone calls promptly should be a main point of emphasis for every firm, the
research suggests, as more than six in ten (63%) millionaires and seven in ten
(71%) ultra-high net worth investors indicate that not doing so is cause for
adviser termination.
While they expect frequent adviser-driven contact, affluent Millennials’
level of comfort
with modern technology provides avenues for communication that older
investors are less likely to embrace, according to the report. For example, when
asked whether they would like their adviser to text them, Millennials were more
than twice as likely as Baby Boomers to indicate that this would be acceptable.
“The results were similar when video-chatting was discussed,”
researchers note, “greatly increasing the touchpoints available to an advieor
with youthful clients.”
A new study highlights the idea of financial
independence in retirement and suggests retirees should turn to family for
financial support as they age.
Even though most seniors don’t want to imagine running
through retirement savings and being unable to manage their money, they are
likely to experience it, according to a new study by Fidelity Investments. The report
found that 60% surveyed admit having witnessed it happen to a friend or family
member—and 40% actually helped manage their own parents’ finances.
“The possibility of losing financial independence is
something for which we all need to plan,” says Suzanne Schmitt, vice president
of Family Engagement, Fidelity Investments. “That’s why it’s important for
families to be in sync about what needs to happen in the event it’s necessary
to help take control of financial decision-making for a loved one. By engaging
in conversations now and having a strong support system in place, families can
help loved ones gracefully transition into that next phase of their lives.”
The threat to financial wellness may be exacerbated by
increased
life-expectancies among all Americans, as well as the risk of encountering
ailments associated with old age such as dementia.
Fidelity writes, “For many Americans, needing help
with the management of finances at some point during retirement is not a matter
of if, but when—especially since studies show that financial decision-making
peaks around age 53 and gradually declines, even among healthy individuals. Moreover,
60% of older adults worry about burdening their families with the task of
managing the finances. However, eight in 10 adults say they are eager to be
involved in the process of helping their parents manage their money in
retirement.
As every family’s financial situation is unique, there
is no definitive roadmap to follow in addressing this burden. However, there
may be a good place to start.
Three-quarters of older Americans surveyed say it’s
very important to maintain the ability to manage day-to-day finances. In
contrast, less than half place a similar importance on managing investments. Fidelity
argues that this suggests family involvement might initially focus on financial
matters with a long-term horizon, such as investments and one’s estate, and
gradually shift to more sensitive issues involving health care and day-to-day
spending.
The firm points to three “tipping points” that adult
children should be aware of that may signal the need to step-in and get
involved in a more direct fashion with the finances: When a parent or loved one
makes a direct request for financial assistance, when age starts to become a
significant factor, or when parents turn 75 years old – this, on average, is
when children step in and let parents take the financial planning backseat.
But they may need to steer their parents in the right
direction even sooner.
“The process of comfortably and thoughtfully moving
from independence to interdependence is critically important,” says Schmitt.
“Well before a tipping point has been reached, families need to be prepared and
make sure they have a transition plan in place—and the good news is, there are
several benefits to building a strong family financial safety net. Doing so
allows parents the ability to maintain their current lifestyle for as long as
possible, helps them preserve their assets and may increase the likelihood they
won’t fall victim to fraud. Best of all, most parents appreciate the
assistance, so it can help forge stronger bonds.”
Assembling Your A-Team
Almost 65% of adults expressed an interest in having
financial advisers help them manage their finances. Advisers believe that
family engagement is critical and many ask clients they suspect of having
diminished capacity to proactively involve their family in financial planning.
Fidelity recommends to those
aging to take stock of the people they consider family—whether bonded by blood
or by choice—and to draft a family financial roadmap. This evolving plan should
consider how old each family member is today and working ahead
in increments of five years, while projecting how everyone’s needs are likely
to change. It should cover topics such as finances, housing, health, caregiving
and end-of-life. Professionals can also be assembled to analyze personal
balance sheets.
The firm says that by the
time someone turns 50, he or she should make sure to have the basics in place: designated
beneficiaries on bank accounts, investments and insurance policies; a current
and complete will; a healthcare proxy; and a living will. All legal documents
should be scanned, stored in a safe place and shared with loved ones. Fidelity
recently introduced FidSafe, a free and digital space to store, access
and share all of a families’ most important documents.
Conducted by Mathew Greenwald and Associates, which is
not affiliated with Fidelity Investments, the Independence Myth study is the
result of online interviews with 1,043 adult children and 1,024 older adults
between October 2015 and June 2016. Adult children had to be at least 30 years
of age with a living parent at least 60 who had a minimum of $500k in assets and
worked with a financial adviser. Older consumers ranged in age from 50 to 80,
had at least $500k in assets and worked with a financial advisor.