- Wednesday, October 16, 2024
A recent survey conducted by Fidelity Investments reveals that younger investors are more focused on improving their financial situations in the upcoming year compared to older generations. Among the respondents, 75% of Gen Zers (ages 18 to 26) and 76% of millennials (ages 27 to 42) are considering financial resolutions for 2024. This percentage is higher than the overall respondent pool at 66%, and significantly higher than the 53% of baby boomers who expressed a similar intention. Gen Xers also showed a strong inclination with 66% considering financial resolutions.
Fidelity Investments believes that financial advisors should recognize this as an opportunity. Previous research conducted by the firm indicated that the majority of advisors have not engaged with their clients' children. However, the latest survey reveals that younger investors are increasingly concerned about financial matters. More than half of them actively keep up with market developments, and they have identified specific areas where advisors could provide assistance.
For Gen Z respondents, 41% believe that an advisor could help them save for or pay off expenses associated with major life events such as college, weddings, or buying a home. Another 36% expressed a desire for an advisor to hold them accountable for their financial goals, while 35% stated that an advisor could aid in developing a long-term vision for their financial life.
Anand Sekhar, Vice President of Practice Management and Consulting at Fidelity Institutional, emphasizes the need for the industry to shift its mindset and recognize the potential for growth in younger investors. He suggests that advisors can play a crucial role in helping these investors stay on track with their financial plans, drawing a comparison to the popular New Year's resolution of going to the gym.
In conclusion, it is evident from the survey findings that younger investors are eager to prioritize their financial well-being in the coming year. Fidelity Investments encourages advisors to tap into this market segment and support them in achieving their goals.
The Importance of Accountability in Achieving Financial Goals
When it comes to New Year's resolutions, saving more money is at the top of the list for 41% of respondents, making it the most common goal. This is followed closely by paying down debt (38%) and spending less money (30%). However, a concerning number of millennials, 20% to be exact, do not have an emergency fund. And among those who do, 19% have had to deplete their fund to cover unexpected financial setbacks, while an additional 13% feel that their current fund is insufficient.
Despite these challenges, younger investors remain optimistic about their financial future, with three-quarters believing that they will be in a better position next year. This positive outlook is encouraging, but it also highlights the importance of accountability in achieving financial goals.
According to experts, simply purchasing a gym membership or new workout gear is not enough to ensure success in fitness resolutions. Similarly, when it comes to financial resolutions, having an advisor who acts as a personal trainer can make all the difference. Advisors can provide not only counseling and management services but also accountability, helping clients stay on track and see their goals through.
A recent survey by Fidelity reveals that holistic planning is gaining momentum, with a significant number of respondents acknowledging financial struggles. In fact, 54% of those surveyed admitted feeling overwhelmed by their personal finances. However, the encouraging news is that 70% of respondents have a plan in place to reach their goals.
The research emphasizes a crucial lesson for advisors: they can support and guide younger investors by expanding their role beyond money management. By addressing stressors and instilling confidence in their clients, advisors can help create a sense of peace of mind. This comprehensive approach recognizes that well-being encompasses physical, mental, and financial aspects.
In conclusion, accountability plays a key role in ensuring the success of financial resolutions. Advisors can provide valuable support by acting as personal trainers, guiding clients towards their goals and helping them overcome challenges. With holistic planning, younger investors can navigate financial struggles with confidence, ultimately achieving a more secure financial future.
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