Behaviors Driving Generational Differences in Wealth Management

While both complexity and volatility create challenges for FPs, they also create great opportunities to understand the next generation of clients.

May 4, 2023

In its latest Global Wealth Management Report, EY focused on two main, and perhaps related, issues: increasing complexity and escalating market volatility. According to the report, 40% of individuals believe that wealth management has become more complex in the last two years, and 57% feel financially insecure because of market volatility.

In the face of economic instability specifically, the report stresses the importance of viewing clients through a behavioral lens. This means recognizing and prioritizing psychological factors in financial decision-making. Measuring behavioral characteristics and blind spots can provide FPs with insights into their clients’ decision-making styles, preferences, and main motivators that are inaccessible through more traditional segmentation models.

Research from Envestnet, also finds that in the face of volatility and uncertainty, people in general prefer more human-to-human interaction in the provision of financial advice. This highlights the importance of the intersection between digital and human—clients, particularly younger ones, want personalization facilitated by technology (i.e., behavioral insights, AI-powered recommendations, and data-driven decision-making) with the individual connection and support provided by a well-informed FP.

Millennials are more reactive

While a large body of research and empirical evidence supports all generational members feeling overwhelmed by complexity, uncertainty, and volatility—there are major similarities that should be underscored. The most important of these similarities is that members of all generations want to engage with a human FP to some extent. There is anecdotal evidence, or perhaps just mistaken stereotypes, that younger generations (Millennials and Gen Z) would prefer all-digital interfaces if possible. However, this is simply not true. In fact, Envestnet found that for younger generations, while digital is important, they still desire the human connection afforded by an FP.

For younger generations, while digital is important, they still desire the human connection afforded by a Financial Professional.

While there are similarities in terms of preferences around financial advice and guidance, there are distinct differences across generations in terms of their responses to uncertainty and instability. And these responses, while requiring more nuanced insights, highlight the importance of the intersection of digital personalization and human connection once again.

Consider this finding from EY: Millennials, compared to Boomers and Gen X, are the most likely to respond to market volatility by shifting more of their investments to savings and deposits. While this fact is reported, speculation as to why is not. So, what motivators and blind spots could be leading to this suboptimal response by Millennials?


Millennials may be more likely than other generations to think of the 2008 financial crisis in the face of market volatility. This was a time when many Millennials were graduating from college, entering the workforce, or dealing with first-time job insecurity. As a result, Millennials may associate any financial insecurity with an improbable, but highly memorable, financial catastrophe. In fact, Millennials, especially older ones, have faced several extreme events during key moments in their lives: 9/11 and its aftermath during their college years, the Great Recession in their 20s, and, most recently, COVID-19, unprecedented (in their lifetimes) inflation, and mass tech layoffs. This increases risk aversion and highlights the invaluable role an FP could play for Millennial clients.


Millennials may feel overconfident in their ability to predict what will happen in financial markets. Because of availability (and other psychological factors), Millennials believe the past, and thus the future, are more predictable than they are. Overconfidence has been shown to increase illusions of control and lead to excessive trading.


Millennials may fall victim to fallacious beliefs related to randomness and error. For example, people may believe they are “owed” a win after a series of losses or that “they can’t lose” after a series of wins (these are attributed to a heuristic called representativeness). This can lead to momentum trading and biased beliefs about how financial assets should perform, as well as a conviction that an individual can facilitate an outcome through skill and aptitude.


Millennials may be using a heuristic wherein feelings or emotions are seen as valid informational inputs for decision-making. While this can be adaptive, in the financial domain it rarely is. As a result, Millennials may feel increased dread or panic in response to market volatility and believe these emotions are informative and imperative when making financial decisions.

Many of these blind spots and decision rules are not exclusive to Millennials—you can find these responses across all generational cohorts. Yet, there is something that uniquely defines Millennials in both EY’s and Envestnet’s data: Millennials desire financial education and guidance more than members of other generations. They want educational tools and personalization that make financial planning more accessible and help them better understand and apply key financial concepts in pursuit of their unique financial goals. This means that behavioral finance-based segmentation tools can increase value and help in the acquisition and retention of new Millennial clients—clients that are members of the largest living generational cohort (it currently has over 72 million members or 22% of the US population).


While both complexity and volatility create challenges for FPs, they also create great opportunities . The best way for FPs to respond to these challenges is to focus on the intersection of digital and human: increase engagement and create deeper human connections, while providing personalization at scale via behavioral insights and segmentation. This intersection represents the vision and purpose of the Atlas Point platform.

How does the Atlas Point Platform help Financial Professionals

Financial Virtues and Pulse Checks invite individuals into the process and allow clients and prospects to understand if they are susceptible to any of these biases.


Download a list of Financial Virtues responses from the Atlas Point platform and identify people who may be susceptible to these biases.  Let them know you are a resource if they are feeling concerned.


If you are proactively reaching out, be mindful of how each individual prefers to receive information.  This can be found in the Financial Professional report you receive for each respondent.

Learn more
Possible preparation ideas for each Bull
  • BLUE BULLS: Be prepared with stories about how you and your clients have addressed increasingly complex needs together.
  • YELLOW BULLS: Connect recent events to their overall financial plan and previous examples of volatility.
  • ORANGE BULLS: Prepare a few bullets on how you have helped others prepare for uncertainty and what specific actions you can take together.
  • PURPLE BULLS: Align these feelings and emotions with other information or parts of their financial plan that you know the person understands.