Consumer Financial Demands Provide Insight for Advisors

Advisors don’t need to stay abreast of all the latest consumer trends, many of which shift on a dime, but there’s valuable insight for advisors in how consumers view the financial services industry.

In fact, the data from MX’s 2023 Roadmap survey is quite compelling for advisors. Coming off a brutal 2022 for both stocks and bonds, leaving investors struggling to find adequate refuge, clients are demanding more and advisors need to be ready to meet those demands.

As MX notes, 22% of consumers are concerned about simply meeting day-to-day expenses while a third are worry about their ability to cover emergency expenses. Those aren’t glamorous topics on par with portfolio construction, but they are topics rich with value-add opportunities for advisors.

“"Consumers want — and need — more personalized and proactive data-driven insights to help manage their finances and achieve better financial outcomes," says Crystal Anderson, Vice President of Product at MX. "In today's economic environment, consumers want a trusted partner that can do more than just provide account balances. Financial institutions and fintechs have an opportunity to take a bigger role in the lives of consumers."

Demographic Details Matter

As has been widely noted, some demographics, including millennials and Gen Z, are becoming more selective about how and where they procure financial advice and their demands and expectations are increasing in corresponding fashion.

The persistent view that Gen X and millennials are highly different from each other implies the demographics’ values don’t align much, if at all. That can make life difficult on registered investment advisors (RIAs) that are looking to cater to both groups – a strategy that makes a lot of sense when considering Gen X, then millennials are going to be the biggest beneficiaries of the much ballyhooed great wealth transfer.

Just a quarter of those polled by MX said financial services do enough to meet their individual needs, but that percentage swells among younger demographics, highlighting ample opportunity for advisors.

“This sentiment is even higher among Gen Z at nearly half (45%). In addition, 54% of consumers said it was likely they would seek a new financial provider if their current provider couldn't deliver on their most wanted features,” notes the research firm.

Financial Wellness a Point of Emphasis

Data regarding consumers’ views on wellness is also pertinent to advisors, particularly those that take holistic approaches to practice management. On a related note, it’s clear clients want more exposure to technology, confirming something many advisors already knew.

Thirty-six percent of those polled by MX wanted automated insights driven by specific data points while nearly a third want tech-driven financial education resources.

“Stronger financial wellness tools and insights could become a key differentiator in 2023 and beyond. Thirty-nine percent of consumers believe financial providers have a responsibility to teach them to be financially strong. Among Gen Z and Millennials, this jumps to 58% and 56% respectively, compared to 47% of Gen X and only 29% of Baby Boomer,” concludes MX.

Related: Inflation Still Thorn in Side of Advisors and Investors