Financial advisors that are focusing their innovation strategies on their current customer base, rather than the next generation of investors, may be missing out on potential future business, according to a new survey by Fidelity Investments.

Fidelity polled 104 broker-dealers and financial advisors in April at its annual "Executive Forum" client event and found that most firms were concentrating on their current client base.

Two-thirds of executives polled said their innovation strategies were most influenced by Baby Boomers, whilst under a quarter (23 per cent) said they focused on Generation X (ages 34-48) and Generation Y (ages 18-33). 

“While Baby Boomers hold the bulk of the nation’s wealth today, there is a significant wealth shift looming with a transfer of a projected $1 trillion from the Baby Boomer generation to Generation X and Generation Y every year for the next 40 years," said Michael Durbin, president of Fidelity Institutional Wealth Services.

"Firms focused on serving their current base, while also anticipating and adapting to changing investor dynamics, may be the best positioned to capture these assets in motion," he added.

According to the poll, a major challenge firms face in driving innovation is changing the mindset of employees.

The poll found that nearly half of firms are relying on the executive team to generate new ideas (47 per cent), rather than looking to younger members of staff.

However, some firms do recognize that good ideas can come from anywhere, with 25 per cent of those polled reporting that the most passionate employees generate the majority of new ideas.

“Fresh insights and new approaches exist in the minds of nearly all employees. Fostering cultures of innovation, which create the energy and openness to enable people to share and promote new ideas, may ultimately help drive the greatest growth in the financial advice business,” said Sanjiv Mirchandani, president of National Financial.

A recent survey by Accenture suggested that advisors must get online to attract a younger, conservative market that is less trusting of financial advisors.