Advisor Authority Study

How to Attract the Next Generation Investor

Holistic planning, fiduciary model and advisor experience are key to earn trust of Gen X and Millennials

Successful advisors drive greater growth and profits by meeting needs of Next-Generation Investors

Louisville, KY – August 24, 2016 – Registered Investment Advisors (RIAs) and fee-based advisors are driving growth and profitability by attracting new clients, and the most successful are focused on an emerging market of next-generation investors.

These younger Gen X and Millennial investors demand a holistic and fiduciary approach to financial planning and appreciate the benefits of merging innovative technology with guided advice. These are among the findings from Jefferson National’s second annual Advisor Authority Study conducted by Harris Poll, based on a comprehensive survey of 1,400 RIAs, fee-based advisors, and individual investors. Advisor Authority identifies top concerns, distinct needs and unique preferences of different generations of investors, to help advisors earn the trust—and earn the business—of this emerging market.

“There is a tremendous opportunity shaping the future of financial advice, as an emerging market of younger investors continues to grow in numbers and to build their own wealth,” said Mitchell Caplan, CEO of Jefferson National. “Our industry’s success is reliant on advisors’ ability to meet the needs of Gen Xers in their prime earning years, and Millennials launching their careers—and our research shows how the most successful advisors are more proactive at working to bridge the divide and meet the distinct needs of the next generation.”

“Coming of age in a new normal of unlimited access to information and the rapid expansion of financial technology, younger investors demand complete transparency and expect [an] holistic approach built on digital solutions plus guided advice,” he said.

The Market Opportunity: Next Generation of Investors Building More Wealth

Advisor Authority shows that year over year the pursuit of profitability is advisors’ single most important practice management issue, and adding new clients is the top driver.

The most successful advisors in this study are a step ahead in focusing on the next generation of younger investors. High AUM advisors who manage $250 million or more, say Gen-Xers (age 36 – 51) are their primary target, and High Earning Advisors who earn personal income of $500,000 or more, say that the younger generation of Millennials (age 18 – 35) are their primary target.

With Baby Boomers shifting into retirement at a rate of nearly 10,000 per day over the next 19 years according to the Pew Research Center, advisors should pay special attention to the ripe market of Gen Xers who are entering their prime earning years.

The Deloitte Center for Financial Services projects that Gen Xers’ net worth is projected to increase from $11 trillion in 2015 to $37 trillion by 2030. Yet less than half (42%) currently work with a financial advisor, according to Advisor Authority. Likewise, Millennials’ net worth is projected to increase from $4 trillion in 2015 to $20 trillion by 2030, according to Deloitte. And, just slightly more than half (52%) of Millennials are currently working with a financial advisor, according to Advisor Authority.

Bridging the Generational Divide: Next-Gen Investors Seek Holistic, Unbiased Guided Advice

When younger investors are asked what matters most for choosing an advisor, clear priorities emerge. According to Advisor Authority, every generation of investor says experience matters, while many also value advisors who put their clients’ best interests first.

When asked to name top priorities for choosing to work with an advisor, Gen X investors are more likely to say years of experience (43%), personalized advice for a holistic financial picture (37%) and use a fee-based fiduciary standard, instead of a commission-based sales model (22%). Millennial investors are more likely to say reducing fees for younger clients (32%), years of experience (31%) and socially responsible investing (23%), closely followed by personalized advice for a holistic financial picture (20%) and a fee-based fiduciary standard, instead of a commission-based sales model (17%).

Coming of age in a new normal of unlimited access to information and the rapid expansion of financial technology, younger investors demand complete transparency and expect [an] holistic approach built on digital solutions plus guided advice

Yet, when asked to name their top three priorities to attract the next generation of investors, advisors cite working with a client’s family and children (36%), increased use of social media (36%), and increased use of mobile technology (26%). By neglecting to address younger investors’ top priorities—including holistic planning, a fiduciary standard, lowering fees and socially responsible investing—advisors are missing an important opportunity to connect and build trust with a growing market that is on the path to earning more, building more wealth, and requiring ever more sophisticated financial solutions over time.

Top Concerns at Each Different Stage of an Investor’s Financial Life

Advisor Authority reveals how investors’ top financial concerns over the next 12 months, largely reflect their stage of life. While saving for retirement is a priority for investors across every generation, younger investors—both Gen X and Millennial—express distinctly different concerns compared to their older counterparts. By understanding what matters most to each generation at every different stage—and knowing how those preferences will change over time—advisors can better serve existing clients and attract new prospects.

For Millennial investors, the top three financial concerns are financing a large expense, such as a wedding or vehicle (31%), financing children’s education (30%) and saving enough for retirement (26%). Gen X investors cite saving enough for retirement (47%), taxes (30%) and financing children’s education (22%). Baby Boomer investors cite cost of healthcare (40%), protecting assets (35%) and generating reliable income during retirement (30%).

Yet, when asked to cite clients’ top three concerns, advisors say saving for retirement (40%), protecting assets (34%) and managing volatility (31%) are most important. According to advisors, client’s concerns about taxes (22%) are rated sixth, saving for children’s education (13%) and buying a home (13%) are tied for eighth, and saving for large expenses (8%) are rated ninth. This will require a shift in perspective. Failing to understand Millennial and Gen X investors—where they are in their financial life and what keeps them up at night—could impact advisors’ efforts to attract new clients, drive growth and enhance profitability.

Merging Innovative Technology with Guided Advice

Advisor Authority reveals how younger investors—especially Millennials—place a greater priority on technology. This year’s study also shows how future generations—and the future of financial advice—depends not just on innovative technology, but also on access to unbiased advisors who can have a real dialogue with clients and provide financial planning in a more holistic way.

When selecting factors that influence investors to work with an advisor, younger investors—both Millennials and Gen-X—rate technology such as enhancements to current website, robust cyber security and mobile technology as more important than their older counterparts. Likewise, Millennials are far more likely to be confident that robo advisors and other digital advisory solutions can manage the volatile market, while older investors are not—nearly half (45%) of Millennials are confident compared to only 19 percent of Gen X and just 14 percent of Baby Boomers.

Younger investors also prefer a more “low-touch” level of engagement. More than half (51%) of Millennial investors prefer low-touch, while just 19 percent prefer high-touch. The balance shifts clearly for older generations. For Gen Xers, 43 percent prefer low-touch and 24 percent prefer high-touch. For Boomers, 41 percent prefer low-touch, and 38 prefer percent high-touch.

But regardless of age, the preferred method of communication with their advisors involves one-on-one engagement. Surprisingly, Millennial investors are more likely to choose face-to-face (22%) as their preferred method of communication, followed closely by email (21%), and phone call (18%). Gen Xers rate phone call (36%) and face to face (28%) higher than email (13%). Boomers are even more likely to rate phone call (40%) and face to face (40%) far higher than email (11%). And advisors should not ignore innovative channels of communication, such as text messages, social media and video chat, as their usage is stronger among Millennials and is likely to continue to grow in popularity among younger clients.

“Financial advice, and the way in which it is distributed and consumed, can be materially different for each generation of investor. Advisor Authority highlights these distinctions, providing actionable insights to help advisors at every level build a more effective practice and create greater value for their clients,” said Laurence Greenberg, President of Jefferson National. “Changing the business model into a mutually beneficial partnership between advisor and client, using the right combination of innovative technology and guided advice, and providing the right services for the client at the right stage in their life, can create greater value for investors at every level—and also create greater value for advisors at every level.”

Jefferson National’s second annual Advisor Authority study addresses many more of the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s volatile market, with a special focus on the most successful advisors and the most affluent investors. To download a copy of Advisor Authority, financial professionals can visit:

To download the Advisor Authority Special Report: Generational Data Book, financial professionals can visit:

To download the first in a series of Infographics on Advisor Authority generational findings, financial professionals can visit:


The second annual Advisory Authority Survey was conducted online within the United States by Harris Poll on behalf of Jefferson National from March 3 – 29, 2016 using a sample from the Harris Poll Panel of Financial Advisors and investors. Among the 683 Financial Advisors, there were 440 Independent Registered Investment Advisors and 243 Broker/Dealers. Among the 733 Investors, there were 167 Mass Affluent, 184 Emerging High Net Worth, 199 High Net Worth and 183 Ultra High Net Worth. Generations are defined as follows: Millennials, age 18 to 35; Generation X (Gen X), 36 to 51; Baby Boomers, 52 to 70; Matures, 71+.
Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. Because the sample is based on those who were invited to participate in the Harris Poll online research panel, no estimates of theoretical sampling error can be calculated. A complete survey method, including weighting variables, is available upon request.
About Harris Poll
Over the last five decades, Harris Polls have become media staples. With comprehensive experience and precise technique in public opinion polling, along with a proven track record of uncovering consumers’ motivations and behaviors, Harris Poll has gained strong brand recognition around the world. Contact us for more information.
About Jefferson National
Jefferson National is a recognized innovator of a leading tax-advantaged investing solution for RIAs, fee-based advisors and the clients they serve. Trusted partner to a network of more than 3,500 advisors, Jefferson National provides greater efficiency, transparency and choice through an adaptable technology platform, award-winning distribution strategy and cost-effective servicing capabilities. Named the industry “Gold Standard” and winner of more than 50 industry awards, the company serves advisors and their clients nationwide through its subsidiaries Jefferson National Life Insurance Company and Jefferson National Life Insurance Company of New York. To reach our advisor support desk, please call 1-866-WHY-FLAT (1-866-949-3528). Learn more at