Key Generational Findings:
- Millennial money in motion: An alarming 48% of emerging affluent Millennials indicate they will definitely or probably leave their current provider in the next 12 months versus only 8% of other investors. While emerging affluent Millennials still represent just 8% of the overall available investable asset pool, they represent 55% of assets held by investors who are currently at risk of leaving their current investment firm.
- Evolving investor needs: Today, just 54% of full service investors have a documented financial plan and while those plans generally address retirement planning, these investors are much less likely to feel they are addressing other financial goals that are a higher priority for Millennials (e.g., major purchase or education planning) or for Boomers who are leaving the work force (e.g., capital preservation or estate planning).
- Brave new world of referrals: The firms that are able to create loyalty among Millennial clients today can expect significant ongoing rewards. Among those clients identified as highly likely to recommend, Millennials made more positive recommendations during the past 12 months (an average of 8.1 per client) than did Boomers (3.3 per client) and Gen X (3.7 per client) combined. But advisors and firms need to actively cultivate this referral source: Millennials indicated they would be more likely to provide referrals if their advisor asked (40%) or they were incentivized to do so (39%).
- Risk of channel defection: One-fourth (25%) of full-service Millennial investors have either tried, or are actively using, a robo-advisor platform and 28% of them rate their satisfaction with this platform higher than for their full-service firm. Also, more than one-third (34%) have a secondary self-directed account, suggesting a flexibility and openness to a variety of service models not exhibited by investors in other generational groups.
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