Gen X and Y are Wary of Financial Advisors

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Younger Investors Back Off Advisors

Advisors take note, when it comes to trust, fees and decision-making, young investors are wary.

Young Affluent Investors Not Loyal to Financial Advisors

A new Cogent Report reveals fewer than 6 in 10 investors of Generation X (57%) and Y (59%) feel that their financial advisor is working in their best interest. These ratings are in stark contrast to relatively older investors who report much higher levels of trust likely due to longer working relationships and more focused attention from their advisors.

Not surprisingly, these younger investors also allocate the lowest proportion of their assets to a primary advisor, highlighting an opportunity for financial providers to bolster current advised relationships and potentially capture greater wallet share.

In addition, advised Gen Y investors are the most likely across all age cohorts to agree that they actively research and validate investment recommendations from their financial advisors before investing (53% vs. 35% of all advised investors). This relatively higher level of engagement likely stems in part from low confidence in current advised relationships as well as the fact that these younger investors appear to be very focused on growing their assets to accomplish both near-term and long-term goals. Meanwhile, Silent Generation investors (58%) are the most likely to delegate investment decision-making, given their life stage in retirement and trust in current advisors.

Lastly, only 56% of advised investors strongly agree that they have a good grasp on the fees that they pay their primary advisor. While Silent Generation (61%) and 1st Wave Boomer (60%) investors are the most likely to agree among the age cohorts, these proportions highlight that there is a fair amount of advised investors who do not have a handle on what they pay advisors for advice and reveals another potential source of investor distrust.

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This entry was posted in Brand and Messaging, Financial Services and tagged , , by Meredith Lloyd Rice. Bookmark the permalink.
Meredith Lloyd Rice

About Meredith Lloyd Rice

Meredith Lloyd Rice is a vice president in Market Strategies' Syndicated Research division. She manages the firm’s syndicated research products focused on the financial advisor market and is the lead author of the Advisor Brandscape® report. She has more than 15 years of experience managing research initiatives in the wealth management industry and has explored a wide range of business issues on the client and supplier side. Prior to joining Market Strategies, Meredith was an associate VP at Chatham Partners where she oversaw a team of researchers and managed the overall design, analysis and interpretation of large-scale studies for institutional financial services clients. Meredith earned an MBA from Thunderbird School of Global Management and a bachelor’s degree from Colgate University. She is a former collegiate rower who now gets her exercise chasing after her 2-year-old daughter and Clumber Spaniel.

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