Schwab did a study about affluent investors aged 30 – 45. The study wanted to determine what matters to this group, how they make decisions and their attitude toward investing. That age group controls nearly $3.5 trillion in investable assets. Schwab is interested because they are the top custodian for independent Registered Investment Advisors (RIAs) like Korving & Company and believe that RIAs are best able to service this group.
So what do these investors have in common?
- The study revealed that they are anxious and insecure about the future because they have already experienced a couple of major economic crises, domestic terrorism, unemployment and several financial bubbles.
- They don’t trust the industry, believing that they recite corporate talking points and don’t really care about them.
- They are short-term focused and like to keep large amounts of cash as a safety net they can trust.
- Success for them is “having the freedom to avoid hardship and to not be a burden to others.”
I should add that people in this age group are less likely to work for a company that offers a pension, making them more dependent on themselves for retirement. Except for that, in many respects, this generation is not very different from preceding ones, except that they are more apt to rely on digital communication and the Internet, having grown up with computers. Many in this group cannot differentiate between types of financial advisors, and do not understand the difference between the independent RIAs and the brokers that work for the “big box” stores.
“Our findings reveal that Generation Now investors want a trusted guide with expert knowledge who deeply understands them and their unique needs. We believe independent advisors fit that need, but this generation just doesn’t know it yet.”
“Their ideal financial advisor relationship is with one whom they can build a trusted and transparent relationship, based on empathy and understanding of the whole person, not just their financial goals,” Schwab says.
“They want their advisor to provide planning and financial advice alongside expert advice in other related areas, such as tax or insurance. Generation Now also expects to be heavily involved in decisions regarding their investment strategy.
“Advisor accessibility is important to this group. They want to be able to communicate with advisors whenever, wherever, through a combination of in-person meetings as well as voice, text, e-mail and videoconferencing.”
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