Next-Gen Wealth Holders: How Paradigms in Behavior Will Impact the Future of Financial Advice
What Makes Next-Gen Wealth Holders Tik (Tok)?
I saw a great social media post the other day answering the question, “Why isn’t social media working for me as a financial advisor?” And the answer was pretty straightforward: If social media isn’t working for you as an advisor, it’s probably because you’re boring.
No, it’s not because your audience isn’t on social media. That excuse may have worked in 2010, but this is no longer the case.
No, it’s not because you didn’t devise and run a complex social media campaign.
Of course, there were logistical reasons given as well, but the gist was pretty straightforward. If you aren’t connecting with an audience on social media, you probably aren’t adding anything of value that people want to see or interact with. Let us not forget the Horatian platitude of “teach and delight,” which reminds us of the necessity to combine instruction and joy to captivate audiences.
What does all of this (especially the Ars Poetica) have to do with understanding Next-Gen wealth holders? The old models are on their way out and the newest ones are making their way down the line.
Over the last few years, those meme-stock chasing, Robinhood-investing, tech-savvy, globally sensitive millennials entered their thirties. And, like it or not, they are positioned to inherit the wealth you are currently managing for their parents! Before you know it, Gen-Z and Alpha will be right behind them.
Advisors looking to build a truly sustainable business – one that extends beyond a lifestyle practice – must get to know the clients of the future.
Understanding Next-Gen Wealth Holders
Using research to explore these generations helps us understand their worldview to lead, market, manage, sell, and build trust with them as prospective clients. Unless you know who they are and what they want, you won’t be capturing their business.
What makes each generation unique? How do they communicate with one another? What types of content do they consume? What is important to them? What is not?
It is only with an understanding of these psychographics that businesses will remain relevant for future generations. And not unsurprisingly, the answers to these questions all have a lot to do with each generation’s level of reliance on technology.
Millennials—The Digital Natives
The Millennial generation refers to the people born between 1980 and 1995. This group is well known for being incredibly tech-savvy, financially focused, and valuing experiences over things. They are most influenced by their friends and family and care more about reviews they read about businesses and less about how long that particular business has been established. This group watches more online streamed content than Gen X and Baby Boomers and still relies on their PC or Desktop from time to time.
What They Care About: Sustainability, authenticity, convenience, and social impact
What They Don’t: Brand longevity
Preferred Social Media Platform: Instagram
Technology Milestones: Reality TV and the smartphone
Gen Z—The Internet-Dependent
Born between 1996-2015, Gen Z is the most Internet-dependent generation. Millennials had to learn how the physical and digital worlds interconnected over time. This generation has never distinguished between the physical and digital. For them, life is a combination of seamless movements between each. Their digital fluency has been the driving force behind shifts in consumer behavior over the past few years.
According to the 3rd Annual International Study of Gen Z, conducted by The Center for Generational Kinetics and commissioned by WP Engine:
- 82% of Gen Z trusts a company more if the images they use in their ads are of actual customers
- 72% are more likely to buy from a company that contributes to social causes
- 66% believe that all websites will “talk” to each other, so every site or app will present a personalized experience
- 75% of Gen Z is more likely to buy a product if they can customize it
What They Care About: Personalized experiences, 24/7 access to the internet, fun, authenticity
What They Don’t: Taking on debt to finance an education
Preferred Social Media Platform: Snapchat
Technology Milestones: Virtual Reality/Augmented Reality
The Alpha Generation—The Digitally Immersed
Progeny of the Millennial generation born between 2016 to present day, these children are expected to be the wealthiest, most highly educated, and technologically-connected group to date. Whereas social media and the internet were tools to be integrated into life for Millennials and those generations that came before them, they will be a way of life for Alphas. Interestingly, Alpha kids are expected to have a strong influence on the shopping habits of their millennial parents, which means companies looking to win specific Millennial market segments are already marketing to Alphas.
Many of these children are already more tech-savvy than their Gen X and Baby Boomer grandparents, having used their parents’ tablets and smartphones to stream videos and play games from a young age.
What They Care About: Immediate access to information, meaningful entrepreneurship and career opportunities, unique digital-first experiences
What They Don’t: Higher education; expected to seek out specialized education or opt for online learning. 74% of Millennial parents of Generation Alpha kids say they will encourage their child at least somewhat to consider studying and pursuing a career in engineering.
Preferred Social Media Platform: Some celebrity children already have social accounts opened and run by their parents, mainly on Instagram.
Technology Milestones: Robotic Toys (now), potentially stay-at-home robot nannies (in the future)
This is How We Live
Technology and its level of integration in each of these generations’ lives drive the significant shifts in human behavior and, therefore, the way the world operates and conducts business. New mindsets and levels of connectedness are reflected with each generation’s growing expectations of technology and organizations.
The companies who succeed in this new world will be those who (1) build a brand message that speaks to the concerns of all the generations above and (2) share that message via the preferred technological spaces and platforms these future clients prefer. Without a detailed understanding of these behaviors, companies won’t be able to adapt effectively.
A Tale as Old as Time
Can you imagine leaving your pride and joy with a stay-at-home robot nanny? The possibility seems light-years away, but the truth is that with the rapid advancement and adoption of technology, robot nannies may not be that far in the future. Nearly half of Millennial parents surveyed (40%) were open to replacing their human nanny with the robot option, which only confirms how a growing reliance on technology impacts mindset. I am sure many readers will remember thinking the internet would be a passing phase, when in fact, we now know this couldn’t be any further from the truth.
Indeed, there has never been a time when meeting the customer where they are and understanding their challenges were not of paramount importance. It’s simply just that those spaces and challenges have evolved and changed—and continue to grow and change—as technology carves the paths we walk on and the world at large in which we live.
Author Marwa Zakharia is the CEO of AssetBook. She has extensive upper management experience, holding positions such as CEO, COO, VP, and providing guidance to companies in various industries as a business strategy consultant. Marwa has worked in the financial services industry and FinTech space for over 20 years, helping companies increase their market share and develop revenue growth processes. She is well-versed in human resources, operations, and overall strategic planning.
Marwa actively volunteers her time as an executive board member and volunteer to non-profit organizations whose causes she is passionate about supporting.
Connect with Marwa Zakharia on LinkedIn