Issue link: https://resources.envestnet.com/i/1527487
Taking the Measure of Advice © 2022 Envestnet. All rights reserved. 5 WHY FINANCIAL WELLNESS MATTERS AND HOW ADVISORS NEED TO CHANGE THEIR PRACTICES Generational cohorts of clients, from baby boomers to millennials, have transformed the nature of wealth management. Baby boomers, who control the bulk of wealth in the U.S. and represent about half (54%) of surveyed advisors' top 20 clients and 42% of all other clients, require a more comprehensive range of advice needs and holistic support as they enter retirement and decumulation. Gen Xers, also known as the sandwich generation, represent around a quarter of advisor clients, at 20% for top 20 clients and 26% for all other clients, and are entering their peak earning years. Their needs range from college savings to supporting aging parents and everything in between. The oldest Gen Xers will also turn 65 in 2030, and their needs will shift to retirement income and longevity planning. Millennials, who currently only represent 6% of surveyed advisors' top 20 clients and 13% of all other clients, are beginning to accumulate wealth as the oldest in this segment enter their 40s. These emerging clients will need support with matters that range from paying off college debt to buying a house to saving for retirement. Millennials are more informed than previous generations, have higher expectations, are more digitally inclined, and have more options for advice, so advisors will need to expand their offerings to compete. Wealth transfer cuts across these generations as the silent generation and baby boomer wealth begins to transition to Gen Xers, millennials, and Gen Zers. This will also increase the need for advisors to deliver multigenerational planning to service and engage their clients and their clients' children and heirs. Clients' needs across age and wealth tiers are broader in scope and more holistic. To compete, advisors must understand and provide support across the client's entire financial household. Clients across generations are increasingly looking for help across a broad range of financial issues: not only investments and long-term planning but also advice on how to optimize cash flow; minimize taxes; navigate the multitude of options for retirement savings, college savings, healthcare savings, health insurance, and life insurance; and manage the stress of juggling all these competing financial priorities. Essentially, clients seek intelligence that can help fuel their financial lives.