Envestnet survey reveals need for blend of technology and human advisor insights
Affluent Americans are growing more concerned about their financial security as economic uncertainty and market volatility continue.
A national survey from Envestnet and the Center for Generational Kinetics reveals that 72% of respondents – adults ages 25 to 65 with an annual household income or household net worth of $100,000 – had a sense of financial security in 2022, but that this has fallen to 59% in 2023.
Concern about their financial future has worsened, with 62% of poll participants now concerned compared to 46% last year.
But the survey shows a generational divide in how investors manage their current fearful state of mind.
The older cohort is most likely to hunker down and stick with their investment strategy while reducing spending to keep on top of rising prices. The younger group are more likely to seek diversification and expand their financial knowledge.
The report also found that high-net-worth and higher earners view taxes as a significant factor when considering investment options, with 30% and 28% respectively identifying them as a major obstacle, compared to only 18% within the broader group of surveyed investors.
Financial Advisors
Getting professional financial advice remains important for respondents of all ages, although they are looking for different things according to the report, Unlock the Mindset of Today’s Affluent Investor: Opportunities in Generational Challenges for Advisors.
Older investors want advice on life stages, wills or trusts, while younger investors need help with significant life changes, tax payments, large purchases and loans. Retirement is an important one for the young affluent group too, while 33% prioritize building a business as their top financial goal.
Technology is a key requirement among affluent respondents, with 66% of higher earners wanting technology to handle their finances.
But this doesn’t negate the value of human advice, with financial advisors named the most trusted source of information about retirement planning, saving, and investing.
“The national study reveals that across affluent generations there is a strong desire for advice and help from financial advisors,” said Jason Dorsey, president of The Center for Generational Kinetics. “In addition, financial advisors would be wise to continue to build their understanding, services, and approach to engage each generation of affluent in a way that best meets their current situation and financial goals. These findings are very exciting and reinforce that now is a great time to be a financial advisor who can serve multiple generations of clients.”
