Financial Advisors

Helping Younger Generations Put Their Wealth to Work for a Better World

A staggering $84 trillion will be passed to younger generations over the next 20 years.

As Baby Boomers transition this wealth to their heirs, it’s no secret that RIA firms need to adapt their practices to attract and retain younger clients.

Millennials are likely to inherit a significant portion of the wealth yet to be transferred, not to mention they’re also reaching their peak earning years, with earning power expected to increase by nearly 75% over the next few years.

This generation takes a strikingly different approach to money from their parents. Understanding how millennial financial and philanthropic interests differ from those of older generations is critical in order to form enduring multi-generational relationships.

Millennials seek a positive impact on the world.

Despite facing greater debt and the impact of economic recessions, younger generations are looking to make a positive impact on the world. In fact, according to a Fidelity Charitable survey, millennial entrepreneurs donate a median of $13,654 and spend nine hours per month volunteering versus $6,192 and six hours per month for Baby Boomers.

Three-quarters of millennials donated to their communities during the COVID-19 pandemic, highest rate among any of the generations, according to a Consumer Payment Behaviors report from payments app Zelle.

Plus, a recent Morgan Stanley survey of active individual investors found that 99% of millennials are interested in sustainable investing.

Advisors have the opportunity to take advantage of these propensities by leading the charge to make philanthropy more accessible to younger generations. By incorporating giving into the client relationship, advisors can attract and retain altruistic millennial clients.

Advisors may do so by consulting on the unique tax advantages of donor advised funds (DAFs), advising on the contribution amounts that make the most sense for each financial plan, and aligning their charitable assets with their values through thematic portfolios. Digital DAFs may allow for families to start planning together, providing advisors with a valuable introduction to younger family members.

Digital solutions make DAFs scalable.

By aligning these goals, advisors can tap into an ever-growing market and empower clients to make an impact. Particularly in anticipation of the largest intergenerational wealth transfer, it's increasingly important for firms to empower younger clients with philanthropic solutions to meet their purpose-driven motivations.

Luckily, technology makes it easier than ever to administer charitable services. Digital giving platforms may provide a streamlined, cost-effective solution so that firms of all sizes can offer philanthropic planning services. With firms making the same management fees on DAF assets as they do with other accounts, why not incorporate charitable giving into your practice to deepen relationships and gain a broader share of wallet?

Disclaimer: Advisory services are offered through Tifin Give, LLC an SEC Registered Investment Advisor. Being registered as an investment adviser does not imply a certain level of skill or training. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Investing always involves risk and possible loss of capital. Opinions expressed herein are solely those of Tifin Give LLC and our editorial staff. All information and ideas should be discussed in detail with your individual adviser prior to implementation. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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TIFIN is a platform that conceives, creates, and operates fintech companies in the areas of wealth management, investments, and personal finance. Our operating companies are shaping the future of investor experience with intelligent products that recognize the uniqueness of each investor. We leverage the combined power of investment intelligence, data science, and technology to make investing a more powerful driver of financial wellbeing.

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