It turns out that being glued to your phone and constantly refreshing for a new update is a personality trait shared by both the TikTok generation and high-earning wealth management clients.
A report released last week by Weston, Massachusetts-based fintech firm Advisor360° found that mass affluent and high net worth individuals are more engaged with their advisors and financial institutions online than ever before.
For example, 69% of the 2,000 investors polled in the client edition of the firm’s Connected Wealth Report said they spend more time checking their accounts online today than they did two years ago. In addition, 74% of respondents said they check their portfolios through their advisor’s client portal at least weekly; and 33% of Generation Z and young millennials are in their accounts daily.
Insight on the online behavior of the next generation is particularly important for advisors considering their tech strategies as they battle for the trillions of dollars expected to change hands over the next two decades during what has been deemed “the great wealth transfer” by many.
A new research report from Financial Planning parent company Arizent called “Capturing the Next Wave of Clients” said along with craving engagement, young investors need attention from advisory firms.
Across the survey pool, “new investors” under age 27 made up only 7% of their total clients, and those aged 27 to 44 made up only an additional 20%. Yet “some of them will benefit from the first phase of wealth transfers,” the report said.
The study says it is also important to offer more ways to engage. While older clients typically have more wealth and prioritize retirement planning and estate planning, younger ones could benefit from advice on college and student loan planning, buying a first home, asset security and even basic things like budgeting and starting to invest.
Richard N. Hart, the senior vice president of corporate development at Advisor360°, said the purpose of its analysis was to better understand technology’s role in facilitating the advisor-client relationship from the perspective of the client.
Among the findings was a clear message that people who hire financial advisors are not interested in being their own investment managers. And while they want to be connected to their advisors and their assets at all times, clients rely on their advisors to do the “heavy lifting.”
“They’re entrusting their financial wealth with an advisor, so they don’t want to do these self-service pieces … they expect that advisor to actually be able to do those services for them,” Hart told Financial Planning. “And across the generations, more so for the older ones, face-to-face is still very, very important. And that makes a ton of sense. Money is personal, and they want to have that personal relationship.”
The survey, led by Coleman Parkes Research on behalf of Advisor360°, was conducted during April and May 2023 among 2,000 mass affluent and high net worth individuals with managed assets of at least $250,000. The average assets under management of survey respondents was $568,342.
Here’s a quick look at the key findings of the Advisor360° Connected Wealth Report: Client Edition.