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Here’s a pair of easy arguments to confirm as they pertain to the wealth management industry. Broadly speaking, only recently have financial services upped the focus on women. Second, there remains little to no emphasis on Gen X, female or male.
Put those two scenarios together and it’s fair to say Gen X women are going overlooked by many advisors, but that shouldn’t be the case because this is a potential-rich demographic. 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.
That’s just five-and-a-half years from now. Add to that, simple math confirms the initial benefits of the great wealth transfer will accrue to Gen X, regardless of gender. Saying this a Gen Xer myself, sorry to millennials and Gen Z, that’s simply how the math cookie crumbles.
Yet even when accounting for those scenarios and the point that more than four in 10 Gen X women are the sole financial and investment “shot callers” in their households, females in this age cohort are largely overlooked by the advisory community. It’s high time for that to change.
Gen X Women Want the Help
What’s relevant here and now is that the industry not catering to Gen X amounts to a gaffe of epic proportions for multiple reasons, not the least of which is the fact that it’s hurting Gen X women. Remember that in many cases, Gen X women were the first females in their families to go to college and to take on higher level roles in Corporate America.
Translation: they have the assets and the sophistication to merit more immediate attention from the advisory community. Data confirm why advisors should swiftly alter their views on working with 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,” observes Brie Williams of State Street Global Advisors (SSGA).
Plus, advisors working with Gen X women are providing elevated service as confirmed by SSGA data indicating that 86% of women working with advisors are satisfied with their portfolios’ performance compared to 54% of Gen X women that are self-directed investors.
Bottom Line Benefits
No client, regardless of age group or gender, should solely be viewed through the context of benefits to the practice’s profit and revenue streams. On the other hand, advisors are in business to make money and there’s nothing wrong with that.
Interestingly, capitalism underscores the benefits of working with Gen X women. SSGA data confirm 41% of these women are likely to recommend their advisors to family members or friends, but just a third of Gen X men will engage in such referrals. Likewise, 36% of Gen X men are apt to stay with an advisor for a decade or more, but that percentage jumps to 46% for women in the same age range.
“Under advised Gen X women investors present advisors with opportunity — the potential to grow their business while playing a vital role in helping to close the gender wealth gap. If you ask me, that sounds like a win-win for advisors and Gen X women investors alike,” concludes Williams.
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