Issue link: https://resources.envestnet.com/i/1527494
When asked about how the fluctuations in the stock market have impacted their approach to investing, Affluent older generations are more likely to stay the course. Not so among Affluent younger generations. They are significantly more likely to take action, including: diversify their investing, rebalance their portfolio, invest less, invest more, lose sleep, pull money out of the market, stop monitoring investments so frequently, switch to another financial advisor, and/or stop investing completely. All of this adds urgency to uncovering your clients' investment sentiment to ensure you are well-positioned to offer personalized financial planning that directly addresses their skepticism, while continuing to build confidence and connection. Strategy to Consider What questions about navigating and responding to investment uncertainty are your clients asking now compared to one year ago? For financial planning, ask about life events or milestones that a client is planning for (e.g., purchasing a home, funding children's education, retirement); current debt obligations; what does their ideal retirement look like, and at what age do they hope to retire; interest in leaving a financial legacy, trust or inheritance for their heirs; and philanthropic goals. Ask about risk appetite and market volatility that examine hypotheticals. For example: y If their portfolio lost 20% of its value within a short period, what would be their likely course of action? y How have they handled significant market downturns in the past? y Given the current market volatility, would they prefer strategies that focus on capital preservation, income generation, growth, or a combination of these? y Are they open to alternative assets and strategies? y How frequently would they review or potentially adjust their portfolio given market conditions? y Do they have any concerns about the current economic climate or specific sectors? y What's the role of cash or liquidity in their portfolio? Opportunity: Consider sharing historical market data with your clients that show how diversified or personalized portfolios have performed in times of uncertainty with macro factors like today's. Help them to see that healthy skepticism is good and personalization is the solution. 31% of Gen X have continued to invest the same given recent market fluctuations, in comparison to 22% of Younger Millennials who have rebalanced their portfolio. ©2023 Envestnet, Inc. and The Center for Generational Kinetics. All rights reserved. 11