Schwab Advisor Services released today a study of affluent individuals aged 30 to 45 that reveals their attitudes about investing and finances, how they make decisions and what matters most to them.
Individuals in that age group control nearly $3.5 trillion in investable assets, says a report by Cerulli Associates.
Schwab's Generation Now Study, named to reflect the immediate opportunity these individuals represent for independent advisors, gives RIAs a window into the investing mindset of this group, says Schwab.
“We are excited because the research clearly shows that the RIA model is right for these individuals, and these insights provide a jumping-off point for us to work together to construct the strategies for growth and transition that will help enable RIAs to continue their success,” said Bernie Clark, executive vice president and head of Schwab Advisor Services.
RIAs can use this study to understand the business implications for everything from client service and talent management to succession and legacy planning for this group, says Schwab.
While these individuals share many of the same financial goals as RIAs' current clients, Schwab says they have defining characteristics related to their outlook on life and finances.
The study revealed that they are anxious and insecure about the future. Living through one of the longest recessions this country has ever experienced, the instability of housing, dot-com bubbles, terrorist attacks, rising unemployment and geopolitical clashes, this group is certain that the next crash or crisis will occur and they are worried about being able to provide for their families.
Many in this group cannot differentiate between types of financial advisors, and they have a general distrust of the profession. They think that advisors don’t understand them and feel advisors recite corporate talking points, having an inability to deliver unique insights and expertise.
They are focused on short-term versus longer-term investments. Their cash savings rates are high and even those with over $4 million in investable assets worry about budgeting and spending levels. Cash represents a tangible safety net they can trust.
Success for this generation is having the freedom to avoid hardship and to not be a burden to others. Success means having enough to cover health-care, education, housing and elder-care costs – and protecting against the unknown. When asked what they would do once they had financial freedom, this group has a desire for life experiences over material goods with almost all who participated in the study saying they would travel.