Life Events Prompt Young Investors to Seek Out Advisors


Advisors are striking out with younger investors, according to a new study by Dynasty Financial Partners, a service provider with a collective $73.3 billion in assets under advisement.

The firm surveyed 1,000 investors between April and May, all of whom currently work with a financial advisor and have a minimum of $500,000 in investable assets. Just 51 percent said they were working with their first advisor, a number Andrew Marsh, vice chairman at Dynasty, said was surprisingly low.

“Our mission is to help advisors understand why someone would be looking for their services and I think there’s a demographic angle to that,” said Marsh. “People seek expert financial advice to fulfill specific, and often age-related needs. Advisors can use this information to craft services that match their clients’ priorities.”

Advisor retirement, investment performance, and ‘didn’t feel like a valued client’ were the top three reasons investors switched advisors. However, this differed by age.

Forty-one percent of those over the age of 75 said they switched advisors because their advisor retired, while just 17 percent of investors between 35 to 44 years of age said the same thing.

Younger investors were more likely to choose factors like investment performance, range of services provided, or expertise as reasons they had switched advisors. Range of services provided was chosen by 27 percent of those under 35; 28 percent of 35-to-44-year olds; and 6 percent of 55-to 64-year-olds.

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The vast majority of investors (61 percent) aged 35 to 44 who had said they had switched advisors did so because they needed an advisor with a different or specific expertise.

“My view on why those demographic switch is that they’re recognizing that their personal complexity of wealth has put them in a position where they’re not getting what they need from their advisor,” said Marsh. “Maybe you’re married. Maybe you’ve got a family on the way, and maybe you’ve got a mortgage. Maybe you’re a professional. Maybe you’re finished paying off your student debt with all the complexity of being a grown-up.”

Sixty-one percent of those surveyed said they first sought out an advisor because they felt they needed professional help but that seeking advice wasn’t triggered by a specific life event. However, investors below the age of 44 tend to wait for a specific life event before seeking financial advice.

According to the survey, 54 percent of those between the ages of 35 and 44 and 42 percent of those under 45 said a specific life event like an inheritance or a job change was the cause. Comparatively, just 31 percent of survey respondents between ages 65 and 74 sought professional financial advice in response to a specific life event.

“One size does not fit all. There might be a 60-year-old that doesn’t have a lot of complexity and a 20-year-old that has a lot of complexity. The main thing would be to tailor your service and overall offering and understand that the scope of their services can expand as their clients age.” Marsh said.

The survey also highlighted generational differences in using social media to source financial advice. According to the survey, nearly half of respondents under age 45 would use social media to find a new advisor, but only 5 percent of those between the ages of 45 and 54 said they would.


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