The Best Prospective Clients in Coming Decades

An expansive study by Edward Jones suggests a tremendous growth opportunity for financial advisors.

(Illustration by RIA Intel)

(Illustration by RIA Intel)

Wealth managers routinely say growing their business is a top priority. If that’s true, a recent study might serve as a map to El “RIA” Dorado.

Many financial advisors already focus on helping people approaching or in retirement. But leaning further into that group could mean a boon for business, and advisors who don’t focus on retirees might want to consider better catering to them.

In 2000, there were 35 million Americans 65 or older. By 2050, there will be 86 million, an “unprecedented” number of people at or approaching retirement, according to an expansive annual retirement study by Edward Jones that surveys more than 9,000 adults.

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A third of people said the Covid-19 pandemic delayed their retirement but a disconcerting number of them were already behind saving for it. Among households with occupants 45 to 54, 42% have no retirement savings, and the median balance was only $100,000 — a sum “hardly enough” to support the lifestyle most envision after they stop working.

But that still leaves tens of millions of Americans with investments, and many others, who might benefit from speaking to a financial advisor. And they are ready and willing to do that. The majority, or 77%, of those planning to retire wish “there were more resources available to help them plan for an ideal retirement beyond just their finances,” according to the Edward Jones study.

“The majority of retirees wish they had done a better job planning for both the financial and the non-financial aspects of retirement. Many Americans are vastly unprepared for a retirement that is both purposeful and financially secure. They told us, however, that they know they need help and they’re now seeking more comprehensive retirement planning,” the report says.

Advisors eager to grow their business should keep the surge of retirees in mind. Even if retirees don’t meet a wealth manager’s minimum amount of assets to become a client, investors have shown considerable interest in paying fees that are not tied to assets under management.

Generations in or entering retirement in the coming decades don’t have the same priorities as younger ones. That might simply be because they are older and their priorities have evolved, rather than due to stark differences between generations. For example, Gen Z (those born between 1997 and 2015) seems especially focused on “achieving wealth,” while older generations are focused on family and happiness.

“COVID-19’s impact forever changed the reality of many Americans, yet we’ve observed a resilience among U.S. retirees in contrast to younger generations,” Ken Dychtwald, a psychologist and gerontologist, said in a statement about the report. Dychtwald is also the founder and CEO of population aging researcher Age Wave, which partnered with Edward Jones on the study.

“Older Americans tend to recognize the value of a long-term view, and so as they think about their lives, longevity and legacy, they’re able to pull from an array of experiences that help them weather current storms, feel gratitude about many aspects of their lives and still plan for the future.”

Other studies have also revealed changes to investors’ wants and needs.

More than half, or 55%, of investors under age 40 with a financial advisor prefer to communicate with them using digital channels compared to just 26% of older investors. And younger clients are using those channels to communicate more.

The wealthiest investors, who tend to be older, have a special affinity for golf. But advisors should pay attention to their other shifting interests, too.

Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.

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