The youth movement is overtaking the financial advice industry.
In its second annual “Advisor Authority” study, Louisville, Ky.-based Jefferson National found that the most successful financial advisors by AUM and income come from Generation X.
While the average age of financial advisors is often reported to be somewhere in the 50s, Jefferson National found that advisors with a total AUM of $250 million or more average 39.8 years old, and that advisors earning more than $500,000 annually are 41.5 years old on average.
According to the study, high-net-worth clients are still generally baby boomers, averaging 56.3 years old, but the average ultra-high-net-worth client now resides in Generation X, averaging 47.2 years old.
Not surprisingly, more advisors in the survey, 46 percent, were likely to target Gen X clients, while 31 percent said they were more likely to target baby boomers.
Jefferson National also found that advisors may underestimate their clients’ concerns about health-care expenses and taxes. When asked to name their biggest financial concerns over the next 12 months, 30 percent of investors overall were most likely to name the cost of health care, and another 30 percent said it was protecting their assets. Twenty-nine percent said it was saving enough for retirement, while 26 percent said it was taxes.
High-net-worth and ultra-high-net-worth investors were more likely to be concerned about health-care costs, asset protection and taxes, and less likely to be concerned about retirement savings than the greater body of respondents. For ultra-high-net-worth respondents, taxes were named No. 1 among issues that could harm their portfolios over the next year.
Forty-six percent of investors listed experience as the top priority when they seek advisors, while 26 percent said the top priority was an advisor who could offer personal holistic advice; 24 percent said the top priority was finding someone who adhered to a fiduciary standard.
While investors are apprehensive moving into the second half of 2016, 47 percent of those who worked with advisors were optimistic, whereas only 35 percent of those who did not were optimistic.
For both advisors and investors overall, the top concerns moving forward were managing volatility, protecting assets and saving for retirement.