A survey released today by Global X Funds, the ETF issuer with $4.8 billion in assets under management, found some interesting points on the expectations investors have regarding their advisors and their asset allocation for the next decade. This is the second year the firm has issued the “Beyond Baby Boomers” survey of Millennial and Generation X investors.
Affluent Millennial Investors
A majority of affluent Millennial investors (64%) and almost half of Gen Xers (48%) say they plan on allocating a greater percentage of their assets to advisors over the next ten years, according to the survey. These numbers are stark when compared to a control group of investors in which only 29% plan on moving a greater percentage to an advisor. A minority of Millennials (18%) and Gen Xers (15%) plan on decreasing their allocation to advisors.
Even prior to yesterday’s shocking news that President Donald Trump fired FBI Director James Comey, majority of investors polled said that the new presidential administration has increased the likelihood that they would work with an FA. While the concerns skewed towards younger investors, it was shared by both groups as 85% of Millennial investors and 57% of Gen Xers said the election affected the likelihood of working with an advisor.
A healthy majority of investors polled also prefer advisors that have strong technological capabilities, the survey found. Ninety-three percent of Millennials and 71% of Gen X investors would work with an advisor with strong tech capabilities. The expectation is that an advisor would have an easily navigated website for 66% of both groups. A social media presence by their advisor was an expectation that only half of Millennials and 37% of Gen Xers have.
“This year’s survey provides some surprising insights that question the conventional wisdom about the future of investing, including the assumed flow of assets to robo-advisors from two tech-savvy generations,” said Jay Jacobs, director of research and vice president at Global X, in a statement.
A significant expectation that both Millennial and Gen X investors had was market downturn protection, with 87% of Millennials and 76% of Gen Xers reporting this as an extremely or very important capability of an advisor.
Global X also asked about thematic investing, which was extremely or very interesting to 83% of Millennials and 61% of Gen Xers. This is a key finding for Global X, which has a robust suite of thematic ETFs, including the newly launched Global X US Infrastructure Development ETF (PAVE).
Jacobs added, “A key takeaway for financial advisors is that affluent younger investors still want personal interactions complemented by a set of technological tools at their disposal. However, specific investor preferences differ from generation to generation.”
The survey was conducted during the first quarter of 2017. Gen X investors are defined as being between 38 and 49 years old and have over $500,000 in individual investable assets. Millennials in this survey are between 21 and 37 years old with over $250,0000.