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I’m a proud Gen Xer and I’ve made no bones about that in this space. Pride aside, Gen X is a generation that’s really struggling when it comes to retirement. A recent headline suggests that with the oldest members of this demographic now 59.5 years old, the average retirement savings of Gen Xers is just $150,000 and the subsequent story indicates many members of this group think they need a miracle to enjoy a solid retirement lifestyle.
Those issues aren’t confined to men or women, but for the purposes of this article, I’ll focus on Gen X women – a demographic that is mostly overlooked by the financial services community though it shouldn’t be.
Consider another pair of nuggets that should be emphasized, not ignored. It’s estimated that helped in part by the great wealth transfer, women will control $30 trillion in assets by 2030. Given that timeline, the obvious implication is that many Gen X will be on the initial receiving end of the great wealth transfer. Alone, that should compel advisors to increase their focus on Gen X women.
Add to that, 42% of Gen X women say they run things when it comes to household finances and that includes investment decisions. Put those factors together and it’s high time for advisors to help Gen X women shed feelings of being undervalued by the advisory community.
Empowerment Matters
In thinking about how to better cater to Gen X women, advisors need to acknowledge several factors. Those include the point that this was the first generation of women to attend college in substantial numbers, the first to earnestly rise the ranks of Corporate America and the first to largely be more dependent on 401(k)s than defined benefit pensions.
As a result of higher levels of education and earnings, “empowered” is an accurate description of many Gen X women and rightfully so. Advisors need to be in tune with that, too. As Brie Williams, head of practice management at State Street Global Advisors (SSGA) notes, Gen X women are also exhausted.
“Born between 1965 and 1980, the Gen X cohort overall was raised to believe that women could do anything,” observes Williams. “They could have it all. Many Gen X women were often the first in their families to go to college, to live on their own, launch a career, or opt to stay home to raise their children. In an effort to have it all, they paved the way for concepts like work/life balance. But they also report high levels of work/family interference — and are exhausted by it.”
Fortunately for advisors, the retirement expectations of Gen X women are straight-forward. According to an SSGA survey, 83% of women in this demographic want to have enough money to last them through their post-work lives. Sixty-two percent want to have the resources to maintain a solid lifestyle when they’re done working.
Other important issues for Gen X women include having the money to pay for travel, meet general expense, pay for long-term care and leaving something to heirs.
Gen X Women Can Stoke Top-Line Growth
Indeed, there’s an element of doing right/good when advisors increase their level of service for Gen X women. Of course, advisors are in business to make money and for those that want to cater to their inner capitalists, there are compelling reasons to focus on Gen X women.
“The 47% of Gen X women who do not currently work with an advisor present a clear and compelling growth opportunity. Research suggests wealth management firms that can attract, grow, and retain high-growth clients segments — including Gen X and millennial women — could see up to four times faster revenue growth,” adds Williams.
Good news: there’s an element of doing good in the above. That being that Gen X women that work with advisors are usually more satisfied with the portfolios than those that are self-directed investors.