Younger generation averse to advice despite $3.5t wealth transfer
Less than half of millennials and Gen-Z say they would be open to using a financial adviser in the future, according to Findex.
The research, which surveyed over 1,000 Australians aged 18-80, found 44% of millennials and 45% of Gen-Z said they would be open to using an adviser with others preferring to turn to their peers or doing their own research.
The reason for this was they felt they lacked sufficient assets to justify professional advice and that the cost was too expensive.
This was despite there being an expected $3.5 trillion in wealth transfer expected to occur between generations by 2050 and 43% of Gen-Z and 35% of millennials expecting an inheritance from their parents or grandparents.
When looking for an adviser, respondents said they considered honesty (47%), expertise (45.5%) and putting client’s interest first (41.7%) as their top priorities.
Those who already did have a financial adviser preferred to deal with them face to face (66.7%) with the main financial goals being ‘to build wealth’ (27.1%), ‘have peace of mind’ (26.3%) and ‘to consult with someone with more financial expertise than myself’ (23.7%).
Findex co-CEO, Tony Roussos, said: “This is a wakeup call for the wealth industry to seriously rethink of how we engage with younger Australians.
“With billions on the line, it is also a clear opportunity for financial advisers to better partner with Baby Boomer clients to not only set up the transfer of family wealth but also to work closely with them to empower their kids and grandkids with the crucial, trusted professional advice.
“By financial advisers investing the time to build multi-generational client relationships earlier on, the wealth is hopefully secured and grown over the long-term.”
AUTHOR
Laura Dew
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
Laura, another very important post. It is Talk Money Week in the UK:https://maps.org.uk/talk-money-week/. Free money advice to UK residents paid for by the UK government with a ten year plan backed by Money Helper information sources. There is a message there! Keep up the good work. Best. John.
It is indeed a wake up call for the financial services industry. Shows what a disorganised house does for getting new clients.