A new survey by a consulting arm of multinational company Cisco Systems has found that there is $31 billion in investable assets that could be snared by financial advisories from investors age 55 and younger.

A growing number of such people have shown a willingness to shift assets from their current firms to those that use cutting-edge technology––such as social media––to manage portfolios, according to the report, released last month by the financial services practices unit of Cisco’s Internet Business Solutions Group.

“There’s an interesting new group of under-55-year-olds who use technology differently and are not as loyal to their advisor, and therefore very much in play,” says Cisco’s Robert Waitman, the director of the global financial services practice, where he oversees the group’s wealth management work. “But it’s absolutely a lucrative client base and the one investment firms should be making for their future.”  

The Cisco unit interviewed more than 1,200 wealthy investors in the U.S., the U.K. and Germany with at least $500,000 in investable assets.

U.S. investors in this cohort currently hold 37% of domestic investable assets, and their share should increase substantially as intergenerational wealth is transferred in the coming years.

But the challenge facing advisors is how to build client trust with this group, which has low confidence in the market and advisors’ financial advice. Thirty-five percent of U.S. investors in this age group said the financial markets don’t provide a level playing field, while only 29% trust the investment advice they get from financial advisors more than that of their fellow investors.

One way to bridge the gap with these tech-savvy investors is to offer state-of-the art technology, Waitman says.
“They want to have video and other collaborative capabilities as an option,” he says, noting that 62% of U.S. respondents said they wanted video to be part of that mix. Fifty-seven percent indicated a willingness to move some of their assets to a firm providing that technology.

Another clear message that developed, he says, was that respondents also wanted regular and frequent interaction: Thirty-six percent of U.S. investors 55 and under spend more than 10 hours a month on their financial lives, while only 20% of older clients do.

“So almost twice as many of them are very involved with their finances and interacting with their advisors on a regular basis,” Waitman says. “The idea of coming in and perhaps sitting in on a high-definition video at the advisor’s office and connecting with experts is something 53% of the under-55 clients wanted to do, compared to only 26% of the over-65 clients.”

Waitman believes advisors must start aggressively courting these younger clients now. “It’s not that hard for them to shift assets to take advantage of getting access to these technological capabilities,” he says.