Journal of Financial Planning: February 2025
Molly Weiss, group president, wealth management platform at Envestnet (www.envestnet.com), is a wealthtech veteran with more than 20 years of experience. Today, Molly drives the continuous innovation of Envestnet’s end-to-end technology and solutions, ranging from portfolio management, financial planning, performance reporting, and digital account management tools. Molly works to deliver the technology platform capabilities that financial professionals need to serve their clients. She holds an M.B.A. from Santa Clara University.
Wealth management is constantly evolving, and as with any growing cohort of investors, many financial planners today are focusing on meeting the needs of younger clients, particularly millennials and Gen Z. Within these groups, there are two main types of clients: those inheriting wealth and those who have created their own. Both require a tailored approach, and integrated technology is necessary to meet these clients where they are.
For the next generation inheriting wealth, the dynamics of wealth transfer play a major role in their financial journey. The widely discussed “Great Wealth Transfer” is already underway, with trillions of dollars changing hands annually, as Cerulli highlights.1 By 2048, Cerulli projects that $124 trillion will be transferred—$105 trillion to heirs.
These individuals often inherit not only assets but also long-standing relationships with financial advisers. While these new investors may be familiar with financial planning, they are also more likely to seek digital, accessible solutions that provide real-time insights into their wealth. There are many solutions available today that can help advisers address their clients’ growing desire to “go digital,” ensure transparency in asset management, and empower their clients to feel in control of their inheritance as they take on a more active role in managing their own financial futures.
On the other hand, millennials and Gen Z who are first-generation affluent investors often face different challenges. They may not have grown up with access to traditional financial guidance, but they are most likely tech-savvy and highly motivated to educate themselves. These clients prioritize financial independence, seek personalized experiences, and prefer to manage their finances through digital tools.
Advisers stand to benefit from digitizing their solution set and the planning technologies they offer—both for their clients’ benefit and importantly, for the growth and sustainability of their business.
Bridge to Deeper Engagement
In both client cases, technology acts as a bridge to deeper client engagement, and not just a service tool. According to the latest generational research on affluent investors from Envestnet and The Center for Generational Kinetics, 79 percent of younger affluent millennials regularly review their net worth. 2 This highlights why solutions like advanced planning software, digital portfolio management tools, and data analytics for creating real-time, personalized plans have moved from “nice to haves” to “must haves” for engaging current and prospective clients.
Another important factor to consider when developing a strategy to build business among a younger client set is how they tend to react to market fluctuations. While older generations are typically known for “staying the course,” affluent younger generations are more likely to take action, such as diversifying their investments, rebalancing their portfolios, or pulling money out of the market. Envestnet’s study found that only 31 percent of Gen X continued to invest the same way in response to market changes, compared to just 22 percent of younger millennials, who were more likely to rebalance their portfolios.
This is another reminder of the importance of discussing market dynamics with younger clients and helping them develop a more holistic financial plan. Additionally, providing real-time data and easy access to their accounts is a must, as these clients are accustomed to reacting quickly to changing market conditions.
Getting to Know Younger Investors
To truly connect with younger investors, take the time to dig deeper into understanding their unique financial behaviors, preferences, and motivations. Younger clients, particularly millennials and Gen Z, are more engaged with their finances than previous generations, and they are actively investing in capital markets. The World Economic Forum’s Global Retail Investor Survey found that 70 percent of retail investors are under the age of 45.3 At the same time, the research points out that young people globally have financial literacy rates hovering below 50 percent, highlighting the need for education within this client segment. In the United States, only 18.3 percent of individuals between the ages of 18 and 34 can correctly answer fundamental financial questions.
Going beyond the need for education, to effectively serve this group, financial professionals must take the time to understand what drives their financial decisions, both in terms of personal goals and broader social values. Start by engaging in open, two-way conversations that go beyond the basics of portfolio management. Ask about their lifestyle goals, values, and attitudes toward risk. Do they prioritize financial independence over retirement savings? Are they interested in socially responsible investing? What kind of legacy do they hope to leave? Understanding their values will help you craft tailored strategies that resonate with their long-term vision.
Additionally, be prepared to adapt your approach. Younger clients are accustomed to technology and digital tools, and they often expect financial advisers to be just as nimble and tech-savvy. Offering transparent, digital-first solutions that allow them to track their progress and stay engaged with their financial plans is crucial to building lasting relationships.
It’s also important to identify the barriers they face in investing. For affluent younger generations, Envestnet’s research showed that the biggest barrier is overspending on unnecessary purchases, which can impact their ability to save and invest effectively. Understanding these challenges can help you offer tailored advice that aligns with their current financial reality.
Finally, be patient and approachable. Many younger clients are still in the early stages of building wealth, and they may be hesitant to ask questions or seek advice. By fostering a relationship of trust, answering their questions thoughtfully, and providing them with the tools they need to succeed, you can help them feel more confident in their financial futures.
Meeting the Next-Gen Where They Are
Here are several actionable strategies that advisers can implement to better serve younger clients with a digital-first mindset:
- Leverage digital tools for personalization. Use advanced technology, including the latest innovations from AI and data analytics, to create personalized, dynamic financial plans that evolve with life changes, market conditions, and shifting goals. This can include integrating digital platforms for regular portfolio assessments, budgeting, and goal tracking. By providing clients with visibility and control over their financial situation, advisers build trust and empower clients to make informed decisions.
- Enhance client communication through tech. Embrace digital communication tools that allow for more frequent and transparent engagement with younger clients. Offering secure messaging platforms or video consultations gives clients easy access to their adviser and keeps them connected—whether they’re inheriting wealth or building it themselves. These tools also allow for real-time updates, fostering a sense of responsiveness and trust.
- Offer educational content delivered digitally. Create digital resources that help younger clients understand key financial concepts, such as investment strategies, tax planning, and retirement savings. Incorporating webinars, interactive tools, and articles into your practice’s offerings can empower millennials and Gen Z to make more informed decisions. Providing these resources not only meets the need for education but also helps build deeper, longer-term relationships.
- Educate yourself on younger investors’ values. Younger generations, especially millennials and Gen Z, are often interested in values-based investing. This could involve aligning investments with environmental, social, and governance (ESG) criteria or other personal values. Understanding these preferences is crucial for building trust and tailoring financial strategies that resonate with their ideals.
- Ask the right questions to help clients prepare for anything. If you’re meeting with clients for end-of-year discussions, inquire about how their priorities have shifted over the past year. Discuss recent milestones that could be anything from purchasing a home to having a baby, inheriting wealth, and more. Explore their responses to hypotheticals, such as how they would act if their portfolio lost 20 percent of its value in a short time. Sharing historical market data showing how diversified portfolios have weathered past periods of uncertainty can reassure clients and highlight the value of a personalized approach.
Final Outcome: Building Lifelong (and Beyond) Relationships
By implementing these strategies and taking the time to understand the unique needs and behaviors of younger investors, financial planners can build stronger, more enduring relationships with this key demographic. As technology continues to shape the future of wealth management, advisers who can meet these clients where they are will be best positioned to thrive in the digital age.
Endnotes
- Cerulli Associates. 2024, December 5. “Cerulli Anticipates $124 Trillion in Wealth Will Transfer Through 2048.” https://www.cerulli.com/press-releases/cerulli-anticipates-124-trillion-in-wealth-will-transfer-through-2048.
- Envestnet and the Center for Generational Kinetics. 2023. “Unlock the Mindset of Today’s Affluent Investor: Opportunities by Generation for Advisors.” https://www.envestnet.com/sites/default/files/2023-12/envestnet-unlocking-the-mindset-affluent-investor-2023.pdf.
- Spear, Hallie. 2024. “Globally Young People Are Investing More Than Ever, but Do They Have the Best Tools to Do So?” World Economic Forum. https://www.weforum.org/stories/2024/05/globally-young-people-are-investing-more-than-ever-but-do-they-have-the-best-tools-to-do-so/.