Data and Research

Less Than 6 in 10 Gen X and Gen Y Millionaires Work With an Adviser

But among the 58% of these investors who do, expectations run high.

By Lee Barney editors@strategic-i.com | October 18, 2017
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Fidelity Investments’ 2017 Millionaire Outlook Study found that members of Generations X and Y now comprise 18% of the nation’s millionaire population, up from 8% in 2012. Further, Fidelity projects that, by 2030, Gen X/Y will hold 47% of the nation’s net household wealth, compared with 45% of Baby Boomers. As Fidelity puts it, “By 2030, Gen X/Y will surpass Baby Boomers in terms of holding the most wealth in the country.” By 2030, they will also inherit $24 trillion, Fidelity projects.

Given this inflection point, Fidelity decided to find out how many Gen X/Y millionaires work with a financial adviser and what they expect of that professional. Only 58% of this group of millionaires work with an adviser, down from 72% in 2012.

Among those who do, expectations are high. They expect their adviser to generate returns of 16% for their portfolio, compared with Boomers’ hopes for 7% returns. Nearly two-thirds of Gen X/Y millionaires, 62%, want their adviser to comprehensively handle their financial situation, compared with 25% of Boomers. And 53% of the former group expect their adviser to have robust technology, specifically data aggregation tools that can give them a complete picture of their financial holdings. Less than a third, 29%, of Boomers have this expectation.

“With the percentage of Gen X/Y millionaires using an adviser on the decline, the industry needs to take a step back and ask: What can we be doing to ‘tip’ these investors toward valuing advice?” says David Canter, head of the registered investment adviser (RIA) segment at Fidelity Clearing & Custody Solutions. “Gen X and Millennials don’t manage their finances in the same way their parents did—they want an adviser who will be their own personal CFO [chief financial officer] and organize and simplify their financial lives.”

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