Study finds next-generation investors are seeking financial advisor guidance on charitable planning

Young investors not working with a financial advisor are twice as likely as Baby Boomers to prefer one who provides charitable planning—while 70% of Millennial and Gen Z investors with an advisor are already having charitable conversations.  

BOSTON, September 13, 2023 – Compared to their Baby Boomer+ counterparts (those age 58 and over), Generation Y and Z investors (ages 21-41) are more likely to seek guidance from financial advisors that goes beyond investment management. That includes charitable planning as an important goal, according to a recent report by Fidelity Charitable^®, an independent public charity and the nation’s largest grantmaker.

As their wealth and financial complexity grows, the number of advised young investors may continue to grow, too. And as Boomers+ age and continue to transfer their wealth, young investors can be a key growth opportunity for advisors. Now is the time for advisors to connect with this promising demographic and nurture these relationships in a meaningful way—leading with impact, purpose, and philanthropy. 

Fidelity Charitable^® today released a report illustrating the charitable planning and personal fulfillment needs that Gen YZ seeks to fulfill when working with financial advisors. The findings are based on data from a 2022 Fidelity Investor Insights survey of 2,490 investors ages 21 and above.

• Fifty-nine percent of Gen YZ agree that they want or expect their primary advisor to provide services beyond investment management.
• Advised younger investors are twice as likely (71%) as Boomers+ (36%) to view their advisor’s support in leaving a legacy that benefits the world as a valuable part of advice.
• Gen YZ investors are almost three times as likely (70%) as Boomers+ (24%) to say that their advisor is helping them achieve their charitable giving goals.
• Young investors who currently are not working with a financial advisor are twice as likely as similarly situated Boomers+ to say that they would prefer a financial advisor who can help with charitable giving goals. 

“We find that younger generations view their relationship with their advisor as more than an avenue to generate financial returns,” said Karla Valas, head of distribution at Fidelity Charitable. “Generations Y and Z, which now outnumber Boomers and control an increasing share of wealth, rely on advisors to guide them on how to strategically participate in charitable giving and use their financial means to make an impact in the world that aligns with their personal values.”

Non-advised Gen YZ investors are looking for advisor relationships that help them achieve charitable giving goals. 

In fact, nearly half of Gen YZ who are not currently working with an advisor agree that they would like to work with a financial advisor who “helps me achieve my charitable giving goals,” compared to 23% of Boomers+ without an advisor.

Gen YZ investors look to their advisors for help achieving purpose, legacy, and philanthropy.

For young investors, 59% agree that they want or expect their primary advisor to provide services beyond financial advice and investment management (compared to 25% of Boomers+), with over two-thirds of Gen YZ investors seeking guidance and advice to help them plan for and achieve overall life goals and peace of mind.

Gen YZ investors who work with advisors are also twice as likely to value their advisor’s support in achieving their life’s purpose and leaving a legacy that benefits the world. In fact, 71% of these younger investors agree that their advisor “helps me think through the type of legacy I’d like to leave behind in the world” (compared to 36% of Boomers+). When indicating the top five factors that they find most important in determining the value of advisors to whom they pay fees, 31% of young investors include “help me achieve my life’s purpose,” with just 14% of Boomers+ ranking this as highly.

Charitable conversations appear to be more prevalent between younger investors and their advisors. In fact, younger investors are almost three times more likely to say that their advisor helps them achieve charitable giving goals, with 70% of advised Gen YZ investors saying this compared to 24% of Boomer+ advised investors.

For more findings from the research, view the full data here.

About Fidelity Charitable

Fidelity Charitable is an independent public charity that has helped donors support more than 382,000 nonprofit organizations with nearly $73 billion in grants. Established in 1991, Fidelity Charitable is rooted in innovation, from its launch of the first national donor-advised fund program to its facilitation of difficult-to-donate assets to its tech-forward giving platform. The mission of the organization is to grow the American tradition of philanthropy by providing programs that make charitable giving accessible, simple, and effective. For more information about Fidelity Charitable, visit https://www.fidelitycharitable.org.