High-Net-Worth Millennial Investors Usher in a New Era of Digital Investing, But Not Without the Guidance of Financial Advisors

Fifty-eight percent of high-net-worth Millennial investors believe digital trading apps like Robinhood and Coinbase offer them the freedom and flexibility to invest the way they want, and more than two out of five investors in this age group own up to 10% of their total investments in bitcoin and crypto. While this younger investor audience is fully embracing emerging and alternative assets, they are hiring financial advisors to manage their investment portfolios at a higher rate than Gen Xers and Boomers.

These findings come from the Future of Finance survey by Wealthramp, a fiduciary advisor matching platform, which polled more than 1,000 U.S. adults with investable assets between $250K to more than $2.5M. The survey revealed differing investment behaviors among generations and outlook on how they want to receive financial advice in the future. Despite the differences, investors of all ages and asset levels share a desire for more education and expect financial advisors to help them become smarter investors in the year ahead.

“Many consumers today are digitally-engaged and committed to learning how to capitalize on new market opportunities driven by crypto and other emerging assets. At the same time, 43% of investors don’t currently own any digital currencies and a third say they have no interest in using digital trading apps,” said Pam Krueger, founder and CEO of Wealthramp. “As the industry enters a new frontier of investing, the stabilizing force will be the fee-only financial advisors who have the expertise to create strategies that are risk-adjusted and fee sensitive to meet their goals.”

When asked to think about the most important aspects of receiving financial advice in the future, survey respondents point to the tenets of excellent financial planning. Seventy percent of high-net-worth investors said having full financial planning to ensure they don’t run out of money in retirement is the biggest consideration, followed by education that helps them become smarter investors (65%) and more efficient management of ongoing investing tasks to optimize performance, like rebalancing and tax loss harvesting (64%).

While Gen Xers and Boomers hold similar views, Millennials’ outlook on the future of financial advice is more digitally focused and purpose-driven. Eighty-three percent cited better coordination between digital tools and robo-advisors and their financial advisors as the top most important aspect, followed by frictionless integration of digital currencies into portfolios, and access to new and additional investment vehicles that achieve socially responsible investing such as ESG.

“Today, most people buy and sell crypto directly using crypto exchanges since the established discount brokers like Fidelity and Schwab currently only allow you to invest in crypto futures, ETFs that invest in crypto futures, or products like the Greyscale Bitcoin Trust which have relatively high fees,” said Jeffrey George, CFA and fee-only investment manager on Wealthramp. “It’s important to understand the limitations and all of the risks involved with buying and selling crypto directly on the exchanges such as token due diligence, data security, transaction fees, diversification, portfolio rebalancing, and position sizing. While it adds a degree of diversification beyond stocks and bonds, it’s important for investors to evaluate crypto assets in the context of their overall investing goals and risk tolerance.”

Other key survey findings include:

• Among those who are invested in crypto, the biggest motivator is their belief that they can profit on current market opportunities. More than a quarter (29%) admit they invested in digital currencies out of a fear of missing out on the early wave if they didn’t purchase right now. Of those who own crypto, older investors and those with higher assets were also more likely to say they purchased digital currencies out of a fear of missing the early wave. Fifty-nine percent of high-net-worth Boomers and 68% of those with assets of over $2.5M cite this as their biggest driver for purchasing digital assets.
• Nearly a quarter of Gen Xers say they invested in crypto and other digital currencies because they consider it the future of investing.
• In line with their value of community, nearly one out of five Millennial investors (18%) said they decided to purchase crypto at the recommendations of friends and family who're investing in the currency.
• Only 8% of high-net-worth investors say they invested in crypto at the advice of their financial advisor.
• The slight majority (52%) of those surveyed have hired a financial advisor to fully manage their investments, while a third of high-net-worth investors are using robo-advisors and digital apps to execute investments. Another 15% are not actively using any digital services and have not hired a professional to help them manage their finances.
• An advisor’s level of expertise and approach to the advisor-client relationship, including fees, are critical considerations for high-net-worth investors when thinking about hiring an advisor in the future. Forty-one percent of respondents say they are looking for an advisor who will collaborate with them to create a financial plan that will build their confidence, followed by 39% who want an advisor with deep investment expertise, such as retirement planning and family inheritance, and transparent fee structures that allow them to fully customize how they pay the advisor.

Methodology

From Nov 5 - Nov 21, 2021, Dynata surveyed 1,003 U.S. adults ages 18 and older with investable assets between $250K to more than $2.5M. The findings are representative of the U.S. general population.

About Wealthramp

Wealthramp is an SEC-registered advisor matching platform that connects consumers with rigorously vetted and qualified fee-only financial advisors. It is the only service that protects people by never selling their information or sharing it without their permission, placing consumers in full control of the process and their communication with the advisor. Built on the foundation of consumer education and privacy protection, Wealthramp screens out conflicts of interest and engages only with established advisors who work solely in the best interests of clients. The company includes independent CFPs, CFAs and CPAs across the U.S. specializing in holistic financial planning, income strategies, stock-based compensation, special needs planning, and more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211209005161/en/