And so it goes – just as wealth advisors get a handle on Baby Boomers’ financial needs and manage their needs into retirement, the game changes again. Millennials and Gen Z are reimagining their financial futures and the solutions that will fuel their ambitions.

When Baby Boomers and Gen Xers entered the economic playing field, their parents’ Great Depression mindset looming over them, they shifted the paradigm away from the Greatest Generation’s approach to finance. They took risks, held onto collateral, became capital allocators, and based decisions on deep personal relationships with advisors.

As wealth management firms strive to stay ahead in an ever-changing landscape, understanding and adapting to generational shifts are paramount. With Baby Boomers entering retirement and Millennials and Gen Z becoming prominent clients, brand-led transformation becomes essential to resonate with these new demographics. To grow alongside younger clients, wealth managers need to understand the behaviors, emotions, and economic needs of Millennials and Gen Z, and rethink the way they deliver on the human experience.

The human advantage in a digital finance world

Humanity is an aspect all clients crave, regardless of age. But the way younger clients relate to their advisors varies drastically from their predecessors. Their parents and grandparents expected to sit across a mahogany table from their advisor. They want the same advisor they’ve been working with for 20 years, offering heaps of advice and counsel, especially around tax and estate planning.

Millennials onward want to meet them where they are. Since these younger generations can manage their finances on their phone, they want to see how you add value in real-time. They want you to know them personally – their beliefs and ambitions – and for you to see two steps beyond what Acorns can deliver to their fingertips. In today’s digital era, the human touch remains crucial. While technology facilitates convenience and accessibility, younger clients still crave meaningful connections. Wealth management firms must leverage digital tools to enhance, rather than replace, the human aspect of their services.

For wealth managers to succeed as younger generations come of age, they must demonstrate their ability to guide clients towards their values and priorities, not just grow their money. This extends beyond the balance sheet and towards investment opportunities where they feel connection, or to understanding the impact of their health or career trajectories.

Nix the pomp and circumstance

Younger clients care less that you remember their birthday or attend their holiday party. They are tech-savvy and have access to essentially the same information as their planners. They’re looking for their advisors to provide insights and expertise they can’t gain on their own and can help focus their aspirations.

Gone are the days of traditional, one-size-fits-all approaches. Younger clients value substance over formality and expect advisors to understand their unique outlooks and challenges. Brand transformation involves shedding outdated practices and embracing a more agile, client-centric approach. This may include reevaluating service offerings, streamlining processes, and fostering a culture of innovation within the firm.

The economy hits different with the demo shift

We thought the great wealth transfer from Baby Boomers to younger folks was already here, but as they retire, Baby Boomers are clinging to their homes and their wealth. Here’s why: the impact of wealth transfer on the economy and job market, potential changes in government policy, and the ever-rising cost of healthcare are depleting their wealth exponentially.

An NBC News Report shows that although experts estimate that Baby Boomers will give more than $50 trillion to their heirs, a significant portion of this wealth is likely to be consumed by healthcare costs.

Baby Boomers, born between 1946 and 1964, currently hold a significant portion of the wealth in the United States. According to the Federal Reserve, Baby Boomers own more than 50% of the nation’s total wealth – approximately $73.0 trillion to $78.1 trillion.

In contrast, Millennials only hold about 6% of the total wealth – approximately $7.8 trillion to $13.3 trillion, according to a study by the University of Cambridge. So, what does this mean for the way younger clients view wealth management?

Asset attitude adjustment

Younger generations want a less traditional view of retirement planning. They want to talk to someone in their generation who understands their unique needs and that they’re different from their parents. They’re more risk-averse as Millennials have witnessed and been significantly impacted by various financial crises – the Great Recession, the bursting of the housing bubble, and the dot-com collapse. The Federal Reserve found that these experiences have led to a lack of trust in traditional investment vehicles and a preference for holding cash instead of making long-term investments.

They desire a shift from personal day-to-day finance and banking to a personalized wealth management perspective. Are they playing the gig economy? Are they renting their home until interest rates settle? Are they planning on getting married and having kids, or are they choosing a less traditional yet increasingly common path of their own? Are they more apt to invest in ESGs than their parents, regardless of the ROI? Prompts like these lead to meaningful conversations about who your client is and what they want out of their relationship with their advisor.

Older generations have been more focused on the accumulation of things, largely as a signifier of status or achievement- the bigger house with 13-foot ceilings. Younger clients value experiences more, and use wealth to live life on their terms, according to findings by JP Morgan. They extract value from a memorable adventure and seek an advisor who can view nourishing, experiential investments as lifestyle capital.

Breaking away from the black box

Baby Boomers trust their advisors inherently. They’ve watched each others’ kids grow up. These clients trust their advisors to allocate their portfolios in the best way possible, without needing to see how the sausage is made.

Millennials and Gen Z demand more transparency and are more proactive about educating themselves with the digital tools available. They can hop on Robinhood or SoFi at a whim, or a multitude of virtual advisor disruptors – disputing the need for set-it-and-forget-it human advisors.

Instead, they want a wealth advisor who is not just helping with existing investments but is going out and seeking opportunities for them. There’s thought and ingenuity that goes into this research, specific to the human you’re working with. Brand-led transformation can help foster a culture of ingenuity, accountability, and integrity that builds trust and credibility with clients.

Putting the brand glow up in play

So how will wealth brand managers justify the expense, and their value proposition, vs virtual and AI-driven wealth management tools? Through brand transformation that aligns with the needs of Millennials and Gen Z. To build trust and prove value with younger generations, wealth we must deliver humanity through a truly personalized and anticipatory experience.

To shift the brand experience, wealth management firms need to focus less on the physical trappings of success and more on understanding clients’ aspirations. Instead of a corner office, create environments where clients feel comfortable. Conduct meetings in shared workspaces, coffee shops, or via video conference tailored around clients’ availability.

Show an interest in what makes their career paths unique. Learn about their desires to travel or support social causes. Then provide customized recommendations on how your services can facilitate turning aspirations into reality.

Make sure to reflect these shifts in your brand by updating marketing materials and digital channels to showcase experiences over material wealth. For example, feature images and stories of clients pursuing their passions like travel or social impact projects rather than stereotypical trappings of success. Create content that speaks to financial planning across various life moments and career shifts – not just retirement.

Lead with transparency. Provide tips and digital tools for budgeting during career transitions or funding passion projects. Use inclusive, straightforward language versus complex financial jargon to explain your expertise, services, and cost structures in simple terms. Highlight flexibility in how and when clients can access your services by promoting virtual and on-demand options alongside traditional in-office meetings. Spotlight your advisors’ personal stories and interests beyond finance to make them more relatable and show their support for causes important to younger investors.

Finally, reflect diversity and inclusion in your workforce and marketing to ensure you represent the shifting demographics of younger generations. The goal is conveying empathy, transparency, and an understanding of what success means to these new investors across all elements of your brand – from communications to visual identity and more. Meet the needs of younger generations by reflecting where they are in your brand.

Brands thrive when its advisors evolve with its clients. As we continue to redefine how we deliver human experiences, these changes require more than marketing and communications adjustments. They require true brand and culture transformations that help us evolve our ways of working and stand out in a market vying for the next generation of investors. Reach out to discuss how you and your brand can evolve alongside your clients.

Brian Elkins
April 9, 2024 By Brian Elkins