Boomers still loom large in the future — but don't count millennials out

Boomers will remain the richest age group over the next decade, but it is the millennials who help determine what is relevant

Jan 11, 2019 @ 3:46 pm

By Eric Clarke

To hear some people talk, the Great Millennial Wealth Transfer has already happened, and woe betide any firm or tech provider that hasn't committed to a full-court press to attract staff and clients in their 20s and 30s. It's true that we should pay close attention to the next generation, but I believe we need a dose of perspective. Let's not be so quick to throw baby boomers and Gen X out with the bathwater.

When we look at the current landscape of investible assets, we see millennials hold a collective $1.6 trillion or so, while boomers have amassed $26.2 trillion. According to data from Tiburon Strategic Advisors, millennial wealth will swell to $10.5 trillion by 2027. Finally, after gritting their teeth through years of ill-advised jabs about avocado toast, fidget spinners and other indignities, it's millennials' time to shine, right?

(More: 6 myths about millennials that could harm adviser businesses)

As it turns out, by 2027 boomers will have even more wealth than they do now, increasing to a projected $40.7 trillion of investible assets. Boomers will inherit from the generations that have come before them and their own holdings will appreciate over time. Over the next decade, baby boomers will still have the lion's share of wealth, and they'll still need your help.

Any adviser knows that there is never a time when consumers need more help than when they retire. Boomers who have spent their lives accumulating wealth need strategies to draw down their savings, fuel the lifestyles they want, contend with medical costs and consider their legacies. Realistically speaking, helping the ever-increasing numbers of retiring boomers will be your bread and butter for the next decade. Probably longer.

That is not to say that the millennial perspective should be overlooked for the next 2½ presidential terms' worth of your career. Millennials are one of the big reasons the words "client experience" resonate in the halls of the financial services industry. They grew up immersed in the internet, came of age with mobile devices and have been reliable, early adopters of digital conveniences that have reshaped what we as consumers expect from the services we need.

Creating a better client experience for millennials will benefit your boomer customers, too. While millennials were first to the digital party, boomers have become some of the most ardent users of technology and have come to expect and appreciate the same kind of one-click convenience as their children and grandchildren.

Not only that, millennials have redefined how we engage with brands. In the past, entrepreneurs created the brand from the top down — the old "Marlboro Man" approach of projecting an image to consumers. Millennials buck this trend — they react to brands in real time and look to the opinions of influencers in hyper-specific niches. While boomers will be the richest age group over the next decade, it is the millennial cohort that helps decide what is relevant. Understanding that — and understanding them — helps our industry stay relevant, too.

Technology and consumer appetites evolve faster than ever these days, with no sign of slowing. No one in financial services should rest on their laurels or take the historic wealth of baby boomers as an engraved invitation to let their advisories drift comfortably into autopilot. Both advisers and the people who build the technology they use must prepare for tomorrow. But in terms of who will have the majority of investible wealth, tomorrow still looks a lot like today.

(More: The 4 I's of building your best tech stack)

Eric Clarke is CEO and founder of Orion Advisor Services. Follow him at @EricRClarke


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