Exploring the views of 1,011 investors across generations X, Y, and Z, Fidelity International’s Next Generation report found that Gen Y were the most likely to seek financial advice after receiving an inheritance, with one in two finding the idea of seeking advice very or extremely appealing.
Meanwhile, Gen X, those between 44 and 59, and the closest age group to retirement, were the least likely to see financial advice as appealing.
With the intergenerational wealth transfer underway in Australia, it has become increasingly crucial that advisers are able to attract those in line to inherit wealth in the coming years.
However, concerns persist among would-be clients with 19 per cent of respondents stating they are concerned about inadequate financial advice, despite two in three Gen Z and Ys, or “next gens” as the report calls them, saying they would consider a financial adviser.
Despite the clear demand for financial advice among young investors, affordability remains the biggest barrier for access (50 per cent), followed by difficulty in finding someone they trust (39 per cent), and concerns about potential bias (28 per cent).
The report found that respondents were also concerned about the risk of poor service (24 per cent), a lack of transparency (23 per cent) and a lack of independence (15 per cent), highlighting a potential poor perception of advisers among the cohort.
Meanwhile, next gens are more likely to be concerned about the time it takes to look for an adviser, which the report said could indicate a lack of confidence on where and how to go about finding an adviser.
“In terms of the perceived benefits of seeking advice, the next generations are looking for someone to bring new knowledge to the table, that is trustworthy and is able to personalise their offer,” the report said.
“The top benefits of financial advice, according to those that are advised or would at least consider advice, include specialist knowledge, better investment options, unbiased advice and alignment with financial goals.
“Younger generations are increasingly more likely to see flexibility and convenience as potential benefits to finding a financial planner.”
When it comes to working with an adviser, next-gen investors value personalised communication above all else in the advice experience, followed by customer-centric services and interactive financial planning tools.
Similarly, Gen Z and Y are more likely to engage with an adviser if they offer easier means of accessing their services, such as offering online consultation. The report found that advisers who offer educational content, including podcasts, are most likely to resonate with these generations.
Digital capabilities also play a significant role in swaying potential clients, with three in four (75 per cent) across all generations stating that whether an adviser can provide a seamless digital experience is a key consideration when choosing an adviser, though next gen placed a higher value on this than Gen X.
Speaking on the findings, Fidelity’s head of wholesale sales, Lauren Jackson, said the next generation of clients are starting to “rewrite the rules of engagement” in the financial services industry.
“Advisers who can demonstrate expertise in emerging investment vehicles, sustainable investing and digital engagement will be better positioned to serve this new generation of investors. And this is just the tip of the iceberg,” Jackson said.
This is why it is Critical the ANNUAL Fee red tape is eliminated. Until it is, it will be impossible to provide cost effective service support to Gen Z.