Money managers are changing their workplace structure to attract wealthy millennials

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The great wealth transfer — where an estimated $84 trillion in assets is expected to shift from the silent and boomer generations over the next two decades — has led to a race among financial advisors to attract a growing class of young wealthy clients.

But firms can only succeed if they can offer both state-of-the-art digital tools and physical branches, as well as hire enough advisors to serve clients’ expanding needs.

A recent survey from commercial real estate brokerage 仲量联行 found that financial services firms are planning on investing in redesigning flagship wealth management offices in global central business districts and opening more branches in suburban markets to meet the needs of the growing number of millennial clients and wealthy families.

“Firms that have wealth management assets are looking to capitalize on this new customer base to be able to attract this younger clientele,” said Victoria Shreeves , a director of industries and work dynamics research at JLL. “There's a lot of technology expected to be part of the package, but that's not to take away from those in-person services as well.”

Many would assume that younger, tech-savvy millennials and Gen Zers would prefer to manage their finances on an app or with AI, and speak with advisors over a Zoom meeting. But only around half of incoming millennial prospects at Raymond James want to execute their financial goals from behind a screen, said Chris Fils, CFP? MBA , managing director of the firm’s Chicago complex, while the other half want access to in-person relationships with planners.

Similarly, big banks globally have begun to implement AI-driven tools in private client services to optimize interactions — not replace the need for an advisor.

“Many of those who come in want to know where their money is,” Fils said. “And if you're talking about passing money to the next generation, it may be the generation that's passing the money down who feels more comfortable coming in.”

Advisor branches and offices are also changing to offer more comfort amenities like coffee bars, game tables and wellness spaces to attract new clients — “almost like a members’ club,” said Shreeves. Now smaller and independent wealth managers have to put up the capital to redesign their offices in the same way in order to remain competitive.

Raymond James and Edward Jones have both changed their flagship office models since the pandemic, bringing multiple advisors under a single roof in metropolitan areas, instead of offices being spread out across different submarkets.?

The next generation of affluent clients wants holistic and seamlessly integrated services, from lending to investment vehicles and taxes to estate planning. Having these different business groups working in the same office demonstrates to clients that their financial planning needs are being taken care of by a unified team, Fils said.?

“It's as simple as, ‘let me just run downstairs, come back up and bring someone,’” Fils said. Wealth management arms are recognizing that opening more branch locations where younger customers are located or are moving to is the “secret sauce” to taking advantage of the wealth transfer, said John McDermott , southeast Florida market leader at Wells Fargo Advisors . But these locations need specialists to serve very specific needs of those inheriting wealth.

“There's always going to be an element of needing somebody there to help me get to the next level,” McDermott said. “Millennials want to do it themselves online and have the certainty of control, but they also want somebody they can talk to and help them navigate the tools that we have. An 800 service number can’t do that for you.”

Some firms are now aiming to hire enough advisors onto teams to fulfill the comprehensive needs of clients inheriting wealth. Edward Jones has been prioritizing hiring local advisors instead of the number of branches, said David Chubak , the company’s head of branch development and U.S. business.

“We need all of our peers and competitors to recognize this challenge of locality,” Chubak said. “It’s an enormous business opportunity to lean into growing and training new advisors and ensuring our industry that we are providing advice for generations.”

Edward Jones expects to increase its advisor headcount by 3% per year on average over the next few years to address the growth in the number of clients. Even with growing fervor for robo-advisors and guidance from generative AI, Chubak said, more people are realizing that human advisors are able to cater to personal and emotional situations better, adding that at least 30% of meetings with clients still take place in physical branches.?

While Fils noted that he doesn’t anticipate needing more advisors to serve the growing client base of families, small business owners and young people, the skills required to serve them have evolved. The largest firms now need a greater number of specialists across lending, life insurance, investing, legal, estate planning and charitable investments, he said.

Advisors need to recognize that the financial goals and experiences of young clients aren’t the same as their older family members, said McDermott, adding that he expects companies to hire younger advisors who can relate to millennials and Gen Z better, and place them on teams with baby boomer clients who will eventually pass down their wealth.

Wells Fargo Advisors has inched away from the model of hiring advisors who are typically straight out of college and in their early 20s, instead opting for an apprenticeship model where younger hires “without as much life experience” serve in junior assistant roles alongside senior advisors.

McDermott said that this collaborative training period is beneficial for teams, because younger partners tend to better understand the technology tools that older advisors may not be familiar with.

“I don't necessarily think that you want to just take on more advisors,” Fils said. “But I think there are certain skill sets that we'd be looking for, especially among career changers that have experience within some accounting background, or some legal background.”

Joblessness in the financial activities industry reached its lowest point in the past year at 1.3% in October, according to the U.S. Bureau of Labor Statistics. This is notably down from August, when unemployment rates in the sector reached 3%, a three-year high that had not been seen since the pandemic.

The numbers may be surprising for finance professionals, given that numerous financial services companies have conducted layoffs in the U.S. this year, including Goldman Sachs , Visa and – most recently – KPMG, which last week reportedly laid off a second round of auditors.

We take a quick dive into a company making a bet that others are running from.

Insurance broker Hippo Insurance announced on Oct. 3 that it would expand home builders’ access to policies for new builds in three disaster-prone states: Florida, California and Texas. The company said it expects to expand insurance access to an additional 50,000 new homes by the end of the year, and has not indicated that these efforts will slow down, even after Hurricane Milton hit Florida in the days following its announcement.

Hurricane Milton is estimated to have caused $36 billion in insured losses, according to risk software company Karen Clark and Company.?

Hippo and its carriers claim that its insurance premiums are 69% lower in California, 42% lower in Florida and 56% lower in Texas than premiums for existing homes in those states. The firm is banking on newer home builds being at lower risk for damage from flooding, storms, wind and earthquakes.

For years, national insurance companies like Farmers, Progressive and AAA have gradually pulled out of the high-risk state of Florida or canceled plans for homeowners there. Hippo’s plan to expand its foothold in these three states — some of the fastest-growing markets in the country — during Florida’s recovery from Milton's devastation could signal both risk and opportunity for insurance brokers.

Here are the latest updates in the world of finance, private equity, banking, real estate, markets and more:

Markets Rally After Election: U.S. stocks advanced to record highs as investors and corporate leaders watched the results of the presidential election, which saw billionaire and former President Donald Trump reelected. The S&P 500 jumped 2.5% Wednesday in its best post-election day performance in history and inched higher in Thursday trading. Click here for insight that executives in finance and investing gave on the economic implications of Trump’s reelection, as well as what leaders across the corporate world and government shared on the results.

Fed Cuts Rates 25 Basis Points: The Federal Reserve lowered its benchmark rate to a target range of 4.5% to 4.75% Thursday, even as this week’s presidential election result raises uncertainty over the future parth of borrowing costs. Before the election, the Fed had been expected to lower borrowing costs again at its December meeting amid continued signs of cooling inflation and a softer job market. But the prospect of new tax and tariff policies are likely to shift the central bank’s economic outlook.

Mortgages Ended October Higher: For the last five weeks, 30-year fixed-rate mortgages have risen and ended October higher than they were following the Fed’s cuts in September . Would-be homebuyers who thought a cut in interest rates would quickly translate into mortgage-rate relief have been disappointed . While Fed Chair Jerome Powell said he expects falling inflation will help “normalize” mortgage rates and the housing cycle, the slow pace has a very real cost. One Arizona mortgage broker estimated that the rate increases of recent weeks could add $500 a month to some families' housing bills.

KPMG Lays Off Auditors: KPMG reportedly laid off auditors last week to make up for lower levels of voluntary attrition, The Wall Street Journal reported, citing unnamed sources. This is the second round of auditor layoffs for the company this year. The accounting firm informed about 330 employees , or 4% of its U.S. audit workforce. Most of the reductions are of managers and associates.

Financial services firms with wealth management assets are aiming to attract newly wealthy younger customers with enhanced office and retail spaces, integrating teams under a single roof and hiring and training more specialized advisors.

We want to hear from you: What strategies should companies implement to attract the next generation of customers in finance?

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