A Glance at Financial Outlooks Across Generations

Mary Ellen Dugan
Chief Marketing Officer, Envestnet

Financial trends are colliding, emerging and adapting across the country. Financial professionals, banks, broker-dealers and rapidly changing technology solutions now serve four generations of investors with a variety of goals, dreams, financial needs and tech abilities.

To understand the mindset of today’s investors – and to help them achieve their financial goals – it’s never been more important to evaluate and interpret the generational differences in how Americans think about money, the technology they access that helps influence their financial actions and decisions — and at the heart of it all, their relationships with the human advisors that guide them along their financial journey.

A new report sheds light on these topics and uncovers the missing research-based insights into what is needed for clients, across generations to achieve financial wellness. The Intelligent Financial Life™ National Study: The Unexpected Intersection Between Technology, Clarity, and the Human Connection is the first national study from Envestnet, led in partnership with The Center for Generational Kinetics.

The research uncovers what investors of all ages really want, need, expect and hope for to guide and inspire them on their journey toward financial wellbeing. It reveals new trends and some very unexpected attitudes that every advisor, investor and industry stakeholder should consider.

According to the study, investors are at a crossroads when it comes to their finances, often feeling overwhelmed by the steps and decisions needed to plan for their financial futures. They are seeking clarity: 50% of Americans don’t know where to start when it comes to getting their personal finances in order.

And 54% wish there were a single technology solution that would simply handle their personal finances for them. Engaging with an endless stream of financial interactions and choices, investors are simultaneously trying to plan for their future while debating how to spend, pay, save or invest.

They are living a disjointed financial life with many struggling to find a way to fit all the pieces together—credit cards, loans, mortgages, businesses, tuition, health care, etc. It can be extremely daunting to manage all these disparate areas of finance simultaneously. With no clear connection between everyday financial decisions and future financial goals, investors feel stuck, stressed and even more anxious in this modern and digitized world.

Bottom Line Findings

Study findings fell within three distinct categories, showing that U.S. investors and future investors:

1. Strongly believe the human element matters in their financial wellbeing. Although digital financial tools are growing in usage and trust, the human element – financial advisors and professionals – is a key factor in establishing financial knowledge and gaining confidence. A majority of Americans (58%) trust a human financial advisor over digital advising options. Interestingly, millennials report the same preference as Gen Xers and baby boomers in managing their personal financials via human interaction.
2. Are confused and craving clarity in what to do when it comes to money. Americans have different behaviors when it comes to how they organize their short- and long-term finances, and how often they review their net worth. Thirty-nine percent of Americans do not formally organize their short-term personal finances – meaning millions of Americans are not taking action to organize their short-term personal finances.
3. Are firmly entrenched in accessing money through technology at their fingertips. Americans are increasingly viewing money as something to be engaged with, managed, invested and understood with the assistance of technology. More than half (58%) of Americans believe that financial apps are important to achieving their financial goals. This number rises to 76% when looking at Americans who currently work with a financial advisor.

The research shows that individuals across the U.S. are not achieving their full financial potential. To be successful, they must embrace and utilize an optimized combination of technology and advisor solutions.

Fully integrated digital solutions that provide Americans with a 360-degree, holistic view of their entire financial picture – and enable financial advisors and professionals to offer data-driven insights on next steps and how every decision can affect their current and future finances – are a good start.

For a Deeper Dive into this Research and Advice on How to Guide Clients Toward Living an Intelligent Financial Life, Join Us April 26 – 27 at the Envestnet Summit 2023 in Denver.