NextGen Millionaires Are Advice-Hungry

Unlike Boomers, Wealthy Gen X&Y are Active Investors, But They Value Second Opinions

The next generation of millionaires may be living large, but they’re also working harder than their predecessors to grow their gains—and they’re relying more on advisors to help.  According to Fidelity’s 2013 Millionaire Outlook study, 92 percent of Gen X and Gen Y millionaires are significantly more likely to work with a financial advisor, compared to 68 percent of the baby boomer generation and older.

Not only are they working with advisors, NextGen millionaires are also turning to advisors for investing recommendations above all other sources. And while 61 percent of Gen X/Y wealthy investors make their own decisions, they look to their advisors for a second opinion—validation, rather than delegation.

These newer millionaires are also active investors, making an average of 30 trades per month. Confidence also rides high with these clients—more than 71 percent of Gen X/Y millionaires say they feel knowledgeable about investing and 72 percent find investing enjoyable

“Financial advisors should be prepared to deal with Gen X/Y clients who are knowledgeable and who like to be involved in their investments,” says Bob Oros, executive vice president of Fidelity Institutional Wealth Services “These new millionaires are collaborators, looking for a validator to partner with on their investments.” 

And this approach seems to be working, as the study that the current financial outlook of today’s Gen X/Y millionaire is significantly better than Boomer millionaires. Additionally, Gen X/Y millionaires average $5.7 million in total assets, while millionaires over the age of 49 averaged $5.2 million in total investable assets and employee-sponsored retirement assets, excluding real estate. 

Yet the next generation of millionaires is also more likely to spend their money. Gen X/Y millionaires own more vacation homes, boats and country club memberships than their predecessors, and are more likely to spend money on foreign vacations and flying first class.


But that doesn’t mean they’re not interested in giving back. Gen X/Y millionaires are 82 percent more likely to volunteer to serve on the boards of charities, compared with only 49 percent of Boomers. These younger wealthy clients also give an average of $54,000 in annual charitable donations.

With this in mind, the study shows that advisors should look to Gen X/Y millionaires as clients interested in longer-term planning, especially as 68 percent plan to pass along as much of their wealth as possible to heirs.  While 73 percent of older generation millionaires use advisors for general investment and portfolio management services, only 48 of Gen X/Y millionaires utilize these services. Instead, advisors should focus on estate planning/gifting, charitable giving and planning and retirement planning with these younger investors.

“Gen X/Y millionaires are taking a dramatically different approach to their wealth than the older generations, signaling a new era of wealthy investors,” Oros says. 

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