Millennial Wave Coming for Financial Advisors: Survey

(FTF News) - Apparently, there’s at least one thing that the Millennial generation likes that their Boomer parents also like — enlisting financial advisors. This might be good news for securities trading firms worried that the wealth of young America was heading down a cryptocurrency rabbit hole.

This was uncovered via a new study sponsored by post-trade systems and services vendor Broadridge Financial Solutions. The survey finds that “44 percent of all investors and 65 percent of the millennial investors say that they are likely (very or somewhat) to begin working with an advisor over the next two years.”

While there are some millennial investors not yet working with an advisor, more than half, or 53 percent, “state that they are likely to work with an advisor due to the concern of not being on track to meet financial goals,” according to the survey.

“Further, almost half (46 percent) of all investors who do not work with a financial advisor, but plan to, state that they are likely to work with an advisor to reduce financial stress,” according to the survey.

The survey of 1,000 U.S. investors also reveals that the “overwhelming majority (96 percent) of investors who work with a financial advisor are satisfied (very or somewhat) with their advisor,” vendor officials say.

It’s also clear that millennials are acting and leaning toward robo-advisors.

Nearly two-thirds of millennial investors or 65 percent “now use a self-directed brokerage account,” according to the survey. “Self-directed trading is expected to increase in the next 12 months, with one third of investors planning to increase trade frequency, while only 5 percent plan to decrease.”

More than a quarter, or 28 percent of investors surveyed “use both a financial advisor and a self-directed brokerage account, showcasing investor demand for longer-term financial planning advice coupled with the ability to invest on demand. Of these investors, 57 percent report that they also use a self-directed brokerage account because they enjoy investing, while 33 percent cite diversification,” according to the survey.

For now, self-directed brokerage accounts are “more popular than robo-advisors, as only 33 percent of investors are familiar with the concept of robo-advisors, and only 6 percent currently use one,” according to the survey.

“However, demand among younger investors appears high. Among millennials familiar with but not currently using a robo-advisor, 76 percent are likely (very or somewhat) to begin using a robo-advisor in the next 12 months,” according to the survey.

Broadridge officials say that the survey was run by 8 Acre Perspective in April and May of this year. The researchers polled U.S. investors “with investable assets of $10K+ and a household income of $25K+,” and the wealth tier definitions were “High Net Worth ($1M+ investable assets), Mass Affluent ($100-999K), Mass Market (<$100K).”

By Eugene Grygo
September 07, 2021


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