Report suggests wealth professionals may have a keen audience that could become their clients in the future
Where are the next wave of clients and how will you reach them?
Or perhaps the big question is, how can you start to build trust with next-gen investors who may otherwise be attracted to DIY investing brands?
Being a trusted source of information for teens who are already showing an interest in investing could prove fruitful for those financial advisors willing to play the long game.
That’s because teens (13-17 years) are already considering how they should manage their finances and start investing according to a new survey from Wells Fargo.
The Wall Street bank found that three quarters of teens say they are ready to learn about investing.
More than half of respondents ask their parents for financial knowledge and almost half learn at school, but more than one third find out about investing and other financial tips on social media with a similar share using websites and online articles.
Opportunity for FAs
This suggests an opportunity for wealth professionals to serve this eager audience with content that speaks to them and helps establish trust with this upcoming cohort of prospective clients.
But offering existing clients ways to ease financial conversations with their children could also be a smart decision, because there appears to be a disconnect between what parents think they are passing down and reality.
“There is a bit of a disconnection between parents’ and kids’ perceptions around financial education,” said Kathleen Malone, financial advisor with Wells Fargo Advisors in Charlotte, North Carolina. “While 61% of parents polled say they’re talking to their kids about finances, only 43% of teens report they have had these conversations. It’s very important for families to discuss money — and for our next generation to understand how to handle their finances.”
The survey found that most parents believe they are good financial role models and their kids agree.
Power of social
Despite the strength of family discussions, teens are heavily influenced by what they see online.
The GameStop frenzy sparked by investment groups on Redditt has made 45% of teens polled by Wells Fargo more interested in investing and many teens believe they are more knowledgeable about Bitcoin than their parents; many parents agree.
“Social media has a profound influence on our younger generations. Those generations grew up with social media and often trust many of the platforms more than their parents do,” says Mariana Martinez, family dynamics consultant with Wells Fargo’s Wealth & Investment Management group. “It is vital to establish solid and open communication, create a shared purpose, and educate our children so that they are prepared for financial independence.”