Millennials and Gen Z are in the driver's seat when it comes to holistic planning - Financial Planning

The holistic model of financial advice is here to stay, at least for the foreseeable future — and to a large extent, we have millennials and Gen Z to thank for it.

According to a recent McKinsey survey, advisors will continue to shed their once-primary roles as investment managers focused on portfolios and asset allocation as they assume the duties of life and wealth coaches, advising clients on health care, insurance, taxes, estate and broader-based financial wellness needs.

Samuel Deane president of Deane Wealth Management — Samuel Deane, president of Deane Wealth Management

As a millennial myself, I think this shift has been and will continue to be fueled by millennials and Gen Zers — the ones who believe to a greater extent than previous generations that financial health is intrinsically linked to physical and emotional well-being, and who will continue to seek financial planners who will not only manage their assets but advise them on how to achieve a balanced, fulfilling lifestyle.

The impact of next-generation investors on the financial advisory sector in years to come cannot be overstated. As millennials grapple with unprecedented financial challenges while setting their sights on future stability, the role of financial advisors becomes ever more pivotal.

Younger clients are not only recognizing the value of professional advice, but are actively seeking it out for a variety of reasons, including their sometimes nontraditional entrepreneurial ventures. Not so long ago I met with a prospective client who wanted to monetize her 100,000-plus Instagram followers but had no idea how to do it. "Do you think a financial advisor would help?" she asked. I let her know that we could assist with cash flow and tax planning, and then offered to connect her with professionals in our referral network if additional resources were needed.

For me, the encounter confirmed the unique juncture at which the financial advice industry finds itself today — one in which the values, priorities and expectations of younger generations are significantly influencing the way in which advice is given, but also how wealth is managed, invested, allocated and inherited. Additionally, their preference for technology-driven solutions has already caused a shift in how financial services are provided.

Trust, familiarity and the enduring role of advisors

Yet despite the digital revolution in wealth management, we've learned that the human element remains irreplaceable. Financial advisors continue to play a critical role across generations by adapting to the changing needs of their clients, whether it's integrating software to better serve tech-savvy clients or providing nuanced, empathetic advice, advisors are more crucial than ever.

According to the financial advisor addendum Trust & Will's 2024 Estate Planning Study, almost one-third of all respondents and half of Gen Z would prefer to use the same financial advisor as their parents or other family members. To me, this speaks volumes about the role trust and familiarity plays in advisor selection.

To illustrate, as a rule, I lead with education in meetings because I want clients to know the reason behind my recommendations, as opposed to telling them what to do. As I was walking a client through my thoughts about her investment strategy, she said, "We don't have to get into the weeds, I trust you because my brother says nothing but good things about his experience with you."

Not only did this highlight the value of personal recommendations within families, but it also focuses attention on a significant opportunity for financial advisors to serve as a bridge between generations. Almost 25% of all survey respondents across generations included hiring a financial advisor as part of their 2024 and 2025 goals, with Gen Z leading at 32%.

To me, this speaks to the growth potential of advisory firms who have captured the attention of Gen Z as they earn more, start families, start and sell businesses and plan for a fruitful retirement.

Estate planning for the younger generation

A growing interest in estate planning among millennials and Gen Z also bodes well for advisors alert to the needs of these cohorts.

Estate planning is witnessing a surge in interest across all generations, with nearly half of all survey respondents from the Trust & Will study expressing interest in working with financial advisors for estate planning. Notably, however, 57% of both Gen Z and millennials expressed interest in working with financial advisors for estate planning.

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Advisors are responding to this demand by supporting these clients with estate planning services and guiding them through the process of creating wills, trusts and advanced directives. How do I know this? Because more than 11,000 advisors are leveraging Trust & Will's digital platform, which allows financial advisors to assist clients in completing their estate plans.

In the process, advisors may uncover new assets as well as build meaningful relationships with family members, which ultimately translates to opportunities for growth. For instance, by using the platform on behalf of a client I discovered that she and her cousins had inherited several lots of land from their great grandparents. Soon after my client's estate plan was completed, she referred her cousin to our firm to guide her through a similar estate planning process.

For financial advisors, understanding generational nuances opens a wealth of opportunities — expanding services, implementing educational initiatives and even leveraging familial influences to connect, advise and guide younger generations.

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