Young clients lead to riches
Forget the saying “rags to riches,” financial advisors! It now turns out that the younger you are, the richer you are.
That’s according to data from the Federal Reserve’s 2022 Survey of Consumer Finances cited in the Cerulli Edge US Retail Investor Edition report for the first quarter. The data show that over the past three years, financial assets of millennials and Gen Z grew the most of any generation. Gen Z, the youngest generational cohort, recorded nearly $6 trillion in financial wealth – up from $2 trillion in 2019.
Several advisors discussed what that means for advisory firms.
Dinon Hughes, financial consultant at Nvest Financial, says Gen Zers have only recently started entering the workforce, which has caused many of them to enrol in retirement accounts. As a Gen Zer himself, Hughes says his firm is investing in both the technology and people that Gen Zers are looking for.
“We need to meet them where they’re at,” he says. “We can’t stick with the same paper-and-pen methods that advisors have used for decades. We have to meet them with the tools that they need and that they are used to using. We also have to meet them with the talent there, too.”
Hughes said that Gen Z and millennial clients, when looking for financial advice, have a “hot button” that drives them to seek out financial planning, “whether that’s a concentrated stock position, if they just had a company, they were involved in IPO, or they’re really worried about life or disability insurance, because they just got a horrifying health condition.”
While Nvest and many other firms are capitalizing on the multitrillion-dollar assets among millennials and Gen Z clients, Hughes notes it’s not always about the dollars and cents.
“We’re a relationship-based
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