Study: Next-Generation Investors Look to Financial Advisers for Charitable Planning
Compared to their Baby Boomer+ counterparts (those age 58 and over), Generation Y and Z investors (ages 21-41) are more likely to seek guidance from financial advisers that goes beyond investment management. That includes charitable planning as an important goal, according to a recent report by Fidelity Charitable, an independent public charity and a grantmaker.
As their wealth and financial complexity grows, the number of advised young investors may continue to grow, too. And as Boomers+ age and continue to transfer their wealth, young investors can be a key growth opportunity for advisers. Now is the time for advisers to connect with this promising demographic and nurture these relationships in a meaningful way—leading with impact, purpose, and philanthropy.
Fidelity Charitable released a report illustrating the charitable planning and personal fulfillment needs that Gen YZ seeks to fulfill when working with financial advisers. The findings are based on data from a 2022 Fidelity Investor Insights survey of 2,490 investors ages 21 and above.
- Fifty-nine percent of Gen YZ agree that they want or expect their primary adviser to provide services beyond investment management.
- Advised younger investors are twice as likely (71%) as Boomers+ (36%) to view their adviser’s support in leaving a legacy that benefits the world as a valuable part of advice.
- Gen YZ investors are almost three times as likely (70%) as Boomers+ (24%) to say that their adviser is helping them achieve their charitable giving goals.
- Young investors who currently are not working with a financial adviser are twice as likely as similarly situated Boomers+ to say that they would prefer a financial adviser who can help with charitable giving goals.
“We find that younger generations view their relationship with their adviser as more than an avenue to generate financial returns,” said Karla Valas, head of distribution at Fidelity Charitable. “Generations Y and Z, which now outnumber Boomers and control an increasing share of wealth, rely on advisers to guide them on how to strategically participate in charitable giving and use their financial means to make an impact in the world that aligns with their personal values.”
Non-advised Gen YZ investors are looking for adviser relationships that help them achieve charitable giving goals.
In fact, nearly half of Gen YZ who are not currently working with an adviser agree that they would like to work with a financial adviser who “helps me achieve my charitable giving goals,” compared to 23% of Boomers+ without an adviser.
Gen YZ investors look to their advisers for help achieving purpose, legacy, and philanthropy.
For young investors, 59% agree that they want or expect their primary adviser to provide services beyond financial advice and investment management (compared to 25% of Boomers+), with over two-thirds of Gen YZ investors seeking guidance and advice to help them plan for and achieve overall life goals and peace of mind.
Gen YZ investors who work with advisers are also twice as likely to value their adviser’s support in achieving their life’s purpose and leaving a legacy that benefits the world. In fact, 71% of these younger investors agree that their adviser “helps me think through the type of legacy I’d like to leave behind in the world” (compared to 36% of Boomers+). When indicating the top five factors that they find most important in determining the value of advisers to whom they pay fees, 31% of young investors include “help me achieve my life’s purpose,” with just 14% of Boomers+ ranking this as highly.
Charitable conversations appear to be more prevalent between younger investors and their advisers. In fact, younger investors are almost three times more likely to say that their adviser helps them achieve charitable giving goals, with 70% of advised Gen YZ investors saying this compared to 24% of Boomer+ advised investors.
For more findings from the research, view the full data here (opens as PDF).
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of the staff of NonProfit PRO.
