There is good news and bad news for advisors when it comes to getting their clients on the road to living an "Intelligent Financial Life," according to Envestnet and Jason Dorsey, president and co-founder of The Center for Generational Kinetics in Austin, Texas.
The good news is there's a significant opportunity out there to reach new clients who don't have an advisor. The bad news is it may be extremely tough to reach at least some of them, especially millennials, according to the results of the first national study on the Intelligent Financial Life, a major theme stressed by Envestnet at its Advisor Summit in Charlotte, North Carolina last week.
"We find that most Americans don't know where to start, don't know what to do, don't know who to trust and don't want to make a mistake," said Dorsey, whose firm specializes in generations research, strategic advisory and keynote speaking.
"What we're seeing from a behavioral standpoint is it's driving lack of action, essentially indecision, which, by the way, over time … just adds to the anxiety and worry, and it makes it harder for many people feel like they can catch up," he said Thursday, during a session on "The Unexpected Intersections with the Intelligent Financial Life" that provided food for thought to advisors about generational trends affecting their business.
"So I believe this is at a crisis mode," he said, adding: "We have a lot of people in America right now that don't where to start and they know they've got to do something but they don't know what to do."
He and Mary Ellen Dugan, Envestnet chief marketing officer, provided insights on research comparing millennials, Gen Xers and baby boomers when it comes to deciphering their thoughts on money, the role of the advisor and future technology demands.
They provided a preview of the findings from the first national study on the Intelligent Financial Life that Envestnet plans to release in June.
Forty-seven percent of investors surveyed for the study said they were reviewing their total net worth weekly, monthly or quarterly, Dugan said. "We've had some challenges going on," she noted. But "weekly and monthly seems like a lot and there's a sense of urgency," she said.
Meanwhile, 42% were looking at crypto "daily or multiple times a day," she said. About "700 times per day in the last three days," interjected Dorsey.
At the same time, 27% were looking at their stocks and bonds quarterly or less, according to Dugan.
Meanwhile, "41% of gen Z trust crypto … as a form of currency," Dorsey noted. The generations that are really into it think they understand what's going on with it, he explained, adding: "It's always been through a mobile device so it's very accessible." Social media is heavily influencing them because that's where they're getting advice, he also noted.
When it comes to financial planning, Dugan said, 39% of the general population were not planning for the short term and 20% of the affluent weren't doing that. "But the next number was interesting: 15% of the affluent audience said that they're not planning for their long-term finances," she said.
