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Advisors absorb a deluge of demographic data and information – some of it credible in terms of identifying client groups of emphasis and areas for potentially valuable segmentation.
There are myriad ways to slice and dice the demographic equation and for advisors/wealth management firms, age/generation is a sound starting point. From there, advisors can delve into higher levels of segmentation such as Asian millennials, Latino baby boomers, and so on. It can also pay to take broad demographic approaches and with that in mind, advisors should consider the benefits in immediately bolstering the level of service provided to Gen X women.
Consider the following. Two of the most discussed topics in the wealth management industry are the great wealth transfer and the estimate that women will inherit as much as $30 trillion in boomer assets. Simple confirms that boomer assets will first flow to Gen X, not millennials and certainly not Gen Z and with women representing roughly half the world’s population, a focus on Gen X females is sensible.
Plus, more than four in 10 Gen X women are the sole financial decision-maker in their homes and that includes making investment decisions.
More Reasons for Advisors to Tailor Strategies to Gen X Women
In the wealth management generation equation, the industry at large tends to focus most on boomers, milllennials and Gen Z. So there are some points about Gen X women that bear repeating, including that many females in this age range were the first women in their families to go to college and climb the corporate ladder.
Something else advisors need to consider: the oldest Gen Xers, male and female, or closing in on an important age and need professional advice on issues ranging from Social Security to long-term care for their parents.
“For example, in 2024, the first wave of Generation X, those born in 1965, will reach a significant milestone: turning 60 years old,” according to State Street Global Advisors (SSGA). “And that milestone brings a myriad of financial challenges into focus: ensuring they’re saving enough to feel secure in retirement, having funds to travel, maintaining their current standard of living, and taking care of both children and senior parents.”
Another reason advisors should step up their offerings and services directed to Gen X women is because it can foster increased confidence. SSGA notes that 86% of women polled that work with an advisors feel confident about their portfolios, but percentage tumbles to 54% for women who are self-directed investors.
Other Reasons to Focus on Gen X Women
While there are occasions when an advisor decides to end a relationship with a client, advisors certainly don’t like it when it’s the other way around. Good news: SSGA observes that Gen X women are more loyal to advisors than their male counterparts. Plus, there compelling economic reasons to work 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,” adds SSGA.
The point: Gen X women are underadvised, but they want professional advice and represent one of the best and arguably one of the most underappreciated growth opportunities for wealth management firms.
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