Despite the flow of assets to robo-advisors and a growing focus on fees, financial advisors can expect increased asset allocations from younger investors in coming years.
A new survey by Global X Funds, an exchange-traded-funds provider, shows that 64% of affluent millennials and 48% of well-off Gen Xers plan to allocate a bigger percentage of their assets to advisors over the next decade, compared with only 29% of a control group of investors.
Moreover, just 18% of millennials and 15% of Gen Xers plan to reduce their allocations to advisors during that period.
The Global X survey, conducted during the first quarter, comprised 200 millennials, with more than $250,000 of investable assets; 200 Gen Xers, with more than $500,000 of investable assets; and 200 investors from the general population between the ages of 21 and 86, with $100,000 of investable assets. The latter served as a control group.
Eighty-five percent of millennials and 57% of Gen Xers in the poll reported that Donald Trump’s election had increased the likelihood that they would work with a financial advisor.
Which advisors are these investors most likely to seek out?
The survey showed that 93% of millennials and 71% of Gen Xers said they would most likely work with an advisor who had strong technological capabilities. Two-thirds of each group would expect an advisor to have an easily navigated website.
Other digital tools were also important, especially to the younger cohort. Sixty-one percent of millennials said they expected advisors to have a mobile app, and 50% expected them to have a social media presence.
Although only 44% of Gen X investors said they preferred an advisor to have a mobile app and 37% expected a social media presence, these percentages indicate preferences that were still material, according to Global X.
Asked how often they preferred to speak with their advisors, 78% of Gen Xers and 71% of millennials said they wanted to interact with their advisors quarterly or more often.