America's emerging millionaires are well positioned for asset growth but are also in need of more financial planning, according to research released Wednesday by Fidelity Investments.
The study from Fidelity's Insights on Advice series shows that 77% of those averaging
While the findings show potential opportunities for advisors, they will need to be cognizant of different characteristics displayed by future millionaires compared to millionaires of other generations, says
"You are dealing with someone who is a bit scared by some of the fees that advisors charge," says Oros when describing the attitudes that many younger people in an
Oros pointed out that one independent registered investment advisor he works with at Fidelity has waived fees for new clients' first two years as a way to attract more people in the near millionaire space and anticipates other planners going the same route.
Some advisors are not adjusting fees but are working to attract younger successful clients by offering extra services. JoAnn May, principal at Forest Asset Management in
"I try to give them a lot of value added services," says May. "You have to be well versed in many areas, not necessarily an expert, but at least know where to get answers to difficult situations."
"We have found that this demographic is less sensitive about price and more sensitive about value," says Kevin J. Meehan, regional president for
A behavioral trend highlighted in the Fidelity study is that investors on the cusp of becoming millionaires are on top of their financial basics such as debt and household expenses, but are not comfortable taking on risk to maximize returns. Advisors can help clients who are close to the millionaire plateau by shifting them from a saver to an investor mentality, says Oros.
"The challenge for advisors is to get [emerging millionaires] to see the benefits of having a financial plan," he says. "It might require them to think differently about how they market."
Fidelity has previously conducted six studies devoted to millionaires but this is the
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