There’s a massive transition of wealth already underway in the U.S. as older generations retire and new generations set the investing course. Cerulli Associates estimates that 40% of financial industry assets, worth about $10.4 trillion, will roll over in the next decade. That’s 37% of advisors retiring.
This series takes a look at how that transition is already playing out as younger, more diverse advisors take the helm. It also looks at how younger clients with different values steer the direction of capital in the U.S., whether inheriting generational wealth or building it for the first time.
This month I talked with Odaro Aisueni, CFP®, wealth planner at Carson Group. We discussed advisor empathy, bias, the importance of diversification within the industry, and more.
Coming Up as a Gen Z Advisor
Karrie Gordon, staff writer, VettaFi: Odaro, I really appreciate you agreeing to participate in this series. Why don’t we start by talking about your journey to where you are today. I know you’re currently a Gen Z wealth planner at Carson Group. How did you get there?
Odaro Aisueni, CFP®, wealth planner at Carson Group
Odaro Aisueni, CFP®, wealth planner at Carson Group: I’m really passionate about and take a lot of pride in financial planning. I got my bachelor’s degree in financial planning, which in our industry is not the norm. Most people kind of stumble into finance.
I went to the No. 1 financial planning program in the nation, at Texas Tech. After I graduated, I had the opportunity to work at a prestigious RIA Plancorp in St. Louis, Missouri and mentored under industry leader Peter Lazaroff. That was a huge blessing to my career.
I also started writing on my blog when I was in college and went on to have some article placements. I got on Investopedia’s top 100 list in 2022 and was the youngest advisor on there, which is pretty exciting for me. Now I’m a Certified Financial Planner and I work here at Carson. I still work directly with advisors but I’m getting more of the holistic business side. I’m looking at how we get to the end product of how clients get advice.
An Industry Steeped in Change
Gordon: That’s an impressive trajectory, I’m looking forward to hearing your perspectives. First up, I know we’ve talked a bit about the rollover within the advisor industry likely in the next decade or so. It’s going to be a massive shift. It means younger generations of advisors like yourself will be steering the money in this country. Are there changes in the industry you’re seeing as a younger advisor coming in versus what your expectations might have been?
Aisueni: Our industry is one of transition and change. Originally there were insurance agents, which is really where the financial services industry started, or at least parts of it, depending on who you ask. So there were people selling insurance, which turned to brokers, and then you have traders, and money managers, and tax professionals.
There have been a lot of iterations of this profession to get us to where we are now with people directly giving financial advice. I think understanding the decades that it’s taken for us to get here brings a little more light to the reality of advisors and clients expecting direct advice for themselves. Our industry has transitioned from taking sectors of finance and packaging that to clients to now realizing the holistic pieces.
“The Best Recommendation Is the Recommendation That’s Implemented”
Aisueni: It really is about the individual person now, because every person has their own unique needs. Every swipe that you make with your credit card, or double tap with Apple Pay, is an emotional decision. So I would say the biggest shift we’re seeing now is not advisors moving past the spreadsheet, it’s advisors moving through the spreadsheet.
It’s not just an analytical lens but applying analysis to each individual person. The optimal approach for our finances is to spend less and save more. In theory, we should all just eat beans and rice, but obviously people don’t want to do that.
There has to be some level of understanding the human side of it. The best recommendation is the recommendation that’s implemented. What a client takes and actually implements in their day-to-day is the best recommendation you can give as an advisor.
Clients Don’t See the Value Add of Behavioral Finance… Yet
Gordon: There is definitely a bigger focus in finance these days on the actual human element. It’s not just about how good an advisor is at analytics but also how good they are at communicating and making that human connection. There’s a bigger push and awareness around behavioral finance now than there was even a decade ago.
Aisueni: Exactly. Adding on to that, as important as behavioral finance is, I think something holding it back is an inability to track the value add of it. If a client sees that an advisor has a behavioral finance designation, they don’t have the wherewithal to see that as a benefit. It’s hard for people to recognize the value. If I tell a client to make a Roth conversion, I can show them $100,000 of tax savings over their lifetime. You can measure and understand that.
An advisor who actually listens to your story as a client, has empathy, and makes that connection, you can’t put that value on a spreadsheet. That advisor may understand that this client values experiences over materials and allocates their money accordingly, but it’s immeasurable data. I think once clients understand that it is a value add, we’ll see the floodgates open. But for now, it’s been hard to expound on that value.
Differing Generational Grit Leads to Different Priorities
Gordon: It’s the kind of intangible that may lead to better client retention over time. However, I can see the challenge in getting clients to understand the enhancement such a designation can have. While we’re talking clients and values, are you seeing a value shift in investment priorities for younger generations of clients versus older ones? Are they thinking differently about inheriting generational wealth or building it for the first time?
Aisueni: OK, a few things. I’m Nigerian and my parents were immigrants. They grew up in a third-world country. So they had a very, very different life than me and my siblings have lived. A lot of their resilience and grit wore off on us, but we don’t have it to their degree.
I think for this next generation of millennials who are going to inherit a lot of wealth, the reality is the grit is different. If someone has the understanding that their parents are going to leave them $3 million-plus, it affects the decisions they make for their lives. Rather than wanting to grind their teeth and work 85-plus hours as an accountant, they might want to do something else that makes less money. And that’s OK.
You can see the impact this mindset is already having on industries. A lot of accounting firms are having issues with staffing CPAs, and the same with hospitals and doctors. These are high-income-producing career fields, but they’re long hours, and very intense. I think younger generations are less willing to chase that because they know they’ll have some type of financial buffer through retirement.
The Reality of Longer Life Spans and Valuing Individual Time Horizons
Aisueni: In addition, I think we’ll see more gifting during their parents’ lifetime. There was a really good research paper that I saw in college. Women whose net worth is in the top 20% live 20% longer than the average life expectancy. That’s upwards of 95. If they had a kid at 25 or 30, by the time they reach the end of their plan, their child is approaching retirement age. I think you’re seeing more advisors, parents, and adult kids recognizing that it may be more valuable to help the kid with their first down payment. It will have a more significant impact on their finances than inheriting at 60 when their financial makeup has already been implemented.
Lastly, even though I am a Gen Z advisor, I think there’s a part of financial planning where there’s really nothing new under the sun. Three years ago, everyone talked about how crypto was going to change the world, and in some ways it has. Most innovations, though, usually land in the middle instead of being disruptors. I think it’s important for young investors to recognize that so they can value the time horizon they have and not make extra risky investment decisions.
An Advisor’s Role in Closing the Wealth Gap
Gordon: In your writings you talk about the importance of the role that a financial advisor can play in helping close the wealth gap for the Black community. That gap is very real and it’s also very much a systemic issue. Let’s narrow it down to the realm of finance. Can you speak to some of the particular challenges the Black community faces regarding generational wealth building and investing?
Aisueni: It’s definitely a multifaceted issue. Across the board, every client has their own unique struggles, because every human is different. I think where the advisor needs to do the work is in leaving their preconceived biases at the door. Any advisor, and any profession, needs to leave preconceptions about an individual behind. This way, they can provide the service they’re being paid for, to the best of their ability. It may seem simple, but it’s not common.
It’s important to recognize how even our own financial best practices have some societal norms attached to them. There’s a big difference between an individualistic society versus a communal society. I’ll give a personal example. My parents are the first people in our family lineage to ever live outside of our village. You’re talking about a family structure that has only known helping each other; it’s communal. There’s no framework or thought process for building out an individual retirement fund.
Our financial best practices are built for living a life within Western, American culture. It’s why checking those preconceived biases at the door before giving advice really matters.
Additionally, I’ve come to realize that the majority of the help that can or should be provided to the Black community’s financial well-being is really reliant on the banking system. I think that while advice is very valuable, you cannot deny the importance of resources. Access to resources has a much bigger impact. My advice on tax planning advice is not going to do much for you if, for generations, your family has been unable to buy a home. There really needs to be a push on the banking system to clean up the wrongs.
Diversification Benefits Extend Beyond Portfolios
Gordon: As a first-generation American, I imagine you have a somewhat different perspective and experience coming into your own in the world of finance. It’s an industry, like many others, that has been historically fairly homogenous demographically. I also know there’s been a lot of effort made in recent years to diversify. What has been your experience?
Aisueni: I would say it is getting better. Personally, I have a lot of mentors, a lot of great Black men and women who have gone out of their way to help me. They’ve given great advice on how to navigate not only the professional world but the financial professional world. I haven’t had to endure the same things they had to endure 20-plus years ago.
The reality is, getting to a place of equity is going to take time. I think there have been steps in the right direction, but there is still work that needs to be done. People are going to have to come to the realization that it doesn’t just benefit Black advisors to have more Black advisors; it benefits all advisors. It really does. It doesn’t benefit just Hispanic advisors to have more Hispanic advisors, and so on. There’s a huge value add to having more diversity within our industry.
One of the most fascinating investment topics to me is diversification. The more diversity you add to your investment portfolio, the more benefits it provides to your investment return, right? I’ve always said, for an industry that has seen the decades of research about the benefits that diversity brings to your investment portfolio, it should not be so hard for us to understand the benefits that diversity will bring to our industry.
A Road Map to Greater Industry Diversification
Gordon: Are there any specific steps you think the industry can take to promote greater diversity? What kinds of supports should there be for younger, more diverse advisors coming in?
Aisueni: There are two big things, one of which is historically Black colleges and universities (HBCUs). Places like Prairie View A&M, Howard University, Spelman College, the list goes on and on. I know a lot of them have financial planning programs, but really supporting the educational training grounds will be a huge value add. The industry needs more people. Going to a place that has a big concentration of young, Black professionals in the making would change a lot.
The second is mentorship. For myself, individuals like Tyrone V. Ross, Dasarte Yarnway, Stephen Rhodes — there’s a laundry list of Black advisors who have done more for me than I could ever ask for. But the reality is that there are more white advisors in the industry. The first two mentors I had in the industry were white men. They really gave me a lot that I wouldn’t have received anywhere else. They played a big part in my story of getting to where I am now. And I think they were part of the change. They saw a young African American man, but it wasn’t just that I proved I was willing to put in the work, I reached out to them.
I’ve had my fair share of hard times; I don’t want to make it sound like I haven’t. In our culture, there’s something about seeing a young, successful, confident Black man that rubs people the wrong way. As Deion Sanders says, and I really agree with, people should not allow my confidence to impede on their insecurities. But the reality is, I think it’s something I’m going to have to deal with for the rest of my career.
Advice for Young Advisors: “They’re Going to Have to Hear You”
Gordon: I know that there is still such a long way to go. The hope of each generation, of course, is to do better than the one that came before, right? I hope it’s a change that you get to really experience during your career and lifetime. Since we’re talking careers, one last question. What advice do you have for young, diverse advisors that are coming up?
Aisueni: As difficult as it is, and I say that with a lot of empathy, remember that you’re still going to be here in 10 years. People love to give millennials a hard time about their avocado toast, but those millennials are CEOs of companies now. Give it time, because that’s one of the biggest assets we have, is time. As young advisors, you may have a really hard time, but eventually you’re going to be in a place of power, and they’re going to have to hear you.
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