Wealthy Millennials Embrace Both DIY Platforms and Professional Advice: Survey

 Commentary  December 11, 2021 at 07:44 AM  Share & Print

What You Need to Know

  • Some 40% of HNW millennial investors hold up to 10% of their total portfolio in crypto.

  • They hire financial advisors to manage their portfolios at a higher rate than older investors.

  • Regarding financial advice, 70% of high-net-worth investors said ensuring they don’t run out of money in retirement is the biggest consideration.

Fifty-eight percent of high-net-worth millennial investors say digital trading apps such as Robinhood and Coinbase offer them the freedom and flexibility to invest the way they want, according to a new survey by Wealthramp, a fiduciary advisor matching platform.

Some 40% of investors in this age group own up to 10% of their total investments in Bitcoin and crypto. 

Although they fully embrace emerging and alternative assets, millennial investors are hiring financial advisors to manage their investment portfolios at a higher rate than Generation Xers and baby boomers, according to the survey. 

The results showed differing investment behaviors and outlooks among generations on how they want to receive financial advice. But 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,” Pam Krueger, founder and chief executive of Wealthramp, said in a statement. 

“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. 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.” 

Dynata conducted the survey in November among 1,003 U.S. adults with investable assets of $250,000 to more than $2.5 million. 

Aspects of Financial Advice

Asked to think about the most important aspects of receiving financial advice in the future, 70% of high-net-worth investors said having full financial planning to ensure they do not run out of money in retirement is the biggest consideration. 

Sixty-five percent said financial advice provides education that helps them become smarter investors, and 64% said it results in more efficient management of ongoing investing tasks to optimize performance, such as rebalancing and tax-loss harvesting. 

Gen Xers and boomers hold similar views, but millennials’ outlook on the future of financial advice is more digitally focused and purpose-driven, the survey found. 

Eighty-three percent of younger investors cited better coordination between digital tools and robo-advisors and their financial advisors as the 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. 

“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 Grayscale Bitcoin Trust, which have relatively high fees,” Jeffrey George, a fee-only investment manager on Wealthramp, said in the statement. 

George said it was important to understand the limitations and 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,” he said. 

Other Survey Findings

The survey found that the biggest motivator for crypto investors is their belief that they can profit on current market opportunities. Twenty-nine percent acknowledged that they invest in digital currencies out of fear of missing out on the early wave if they did not buy them right now. 

Fifty-nine percent of high-net-worth boomers and 68% of those with more than $2.5 million in assets also said they purchased digital currencies out of fear of missing the early wave. 

About a quarter of Gen Xers said they invested in crypto and other digital currencies because they consider it the future of investing. 

Eighteen percent of millennial investors said they decided to purchase crypto on the recommendations of family and friends who were already investing in the currency. 

Just 8% of high-net-worth investors said they invested in crypto on the advice of their financial advisor. 

Fifty-two percent of survey participants reported that they 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. 

And 15% said they are not actively using any digital services and have not hired a professional to help them manage their finances. 

What Wealthy Investors Want in an Advisor

When they think about hiring an advisor in the future, high-net-worth investors in the survey said an advisor’s level of expertise and approach to the advisor-client relationship, including fees, are critical considerations. 

Forty-one percent of respondents said they are looking for an advisor who will collaborate with them to create a financial plan that will build their confidence.

Thirty-nine percent said they 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. 


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