The similarity in advice-seeking behavior between Baby Boomer parents and Millennial children is especially prevalent at the upper-end of the income scale, the study suggests. Phoenix says the research is drawn from the Phoenix Global Wealth Monitor tracking program and divides the U.S. affluent and high-net-worth investors into 12 segments, based on their intended level of investment activity. The most active segment is a group of young investors Phoenix calls the Active Wealth Millennials.
David Thompson, managing director of Phoenix’s affluent market business, tells PLANADVISER that there are somewhere in the ballpark of 3 million affluent and financially active Millennials—many of whom are interested in professional financial advice. He says the research shows that about 72% of Active Wealth Millennials currently get professional advice, just slightly higher than affluent Baby Boomers (at 70%).
The similarity in adviser usage ends there, Thompson says, as Millennial investor needs and expectations for professional advice differ dramatically from their parents.
“Our new data clearly shows that Millennial investors are highly active, smart and tech savvy, and clearly not wary of financial advice, as they realize they lack investment expertise,” Thompson says. “However, unlike older investors, Millennials are seeking advisory models that include not only the human factor, but also the tools, automation, and online education that will enable them to handle some of their wealth management needs themselves.”
As further proof the generational differences in approach towards financial advice, 40% of Millennial investors describe their advice orientation as “selective,” versus only 21% of Baby Boomers.
“All of our data shows this is an underserved market right now,” Thompson says of affluent Millennials. “A lot of retirement specialist advisers don’t pay very much attention to the younger investing segments—they figure this group just doesn’t have the assets and substantive wealth to desire advice, especially since retirement is so far away.”
Yet, Thomspon says that affluent Millennials present a compelling opportunity for advisers to win new clients. “Most of these affluent Millennial households have yet to really build a strong relationship with the advisers they’re already using,” he explains, “so that’s another important point to keep in mind. They are likely to be looking for new sources of guidance.”
More on Phoenix Marketing International research, including information on an upcoming webinar discussing affluent Millennial investors, is available here.