Gen XYZ Investors Are Redefining Adviser Relationships

Described as investors born after 1965, this group prioritizes digital communications and broader wellness needs and is willing to work with multiple advisers.

Young investors are reforming their relationships with their advisers. 

A recent Fidelity study found more investors have begun to work with an adviser since the start of the pandemic. And, from May 2020 to June 2021, more than a quarter of advised investors hired a new adviser, according to the study.

Of the investors surveyed, younger workers, identified as “Gen XYZ,” or those who were born after 1965, are looking to their adviser for support with their health, family, work and wealth. In fact, the study found that 34% of younger investors want their adviser to offer life guidance outside of traditional financial advice. When working with younger investors, advisers should consider offering services such as career coaching; real estate planning; philanthropic planning; or environmental, social and governance (ESG) solutions, Fidelity says.

Gen XYZ investors are also prioritizing their digital experience with advisers. According to the survey, 48% of investors born after 1965 were more likely to relate to a financial adviser with a social media presence than one without. Additionally, 65% said they would prefer to work with an adviser in a paperless firm rather than a firm that uses paper statements.

As a result, younger investors are looking for digital, on-demand communication from their advisers. Throughout the pandemic, younger investors were more likely to adapt to digital communication with their advisers, such as videoconferencing, chatting online or texting, than older investors, according to the survey. Fidelity adds that it’s likely these investors will expect their adviser to be available through these channels now.

Fidelity encourages advisers to continue their digital engagement strategies and consider implementing them as permanent solutions. The firm also says advisers should market their practice outside of traditional communication channels, including through social media, targeted content, digital advertising and search engine optimization (SEO).

The study reported Gen XYZ investors are less committed to a single adviser, and, instead, many are interested in working with multiple financial planners. Thirty-five percent of younger investors had multiple advisers, compared with 13% of Baby Boomers.

Additionally, while older investors are more likely than younger investors to search for an adviser within their local area, younger investors are willing to look elsewhere. Fifty-nine percent of Gen XYZ investors say they have hired advisers outside their local area. Because of this, Fidelity anticipates there will be more competition for advisers working with Gen XYZ clients, as more are willing to look farther for the right fit.

While investors are searching for advisers who will help them with all their needs, most ranked financial planning as the benefit that was most valuable during the early days of the pandemic. Additionally, 44% of advisers said clients with financial plans were less anxious than those without. Nearly seven of 10 advisers surveyed said they also had a stronger relationship with clients who have financial plans than those who don’t.