The current age range for Gen X is 46 to 61 and according to some estimates, that demographic is populated by 65 million people in this country. From that it can be inferred that roughly 32.5 million are women, representing a lot clients and prospects for advisors.
That age range also implies that only the oldest Gen Xers are knocking on the door of retirement, at least as defined by the earliest age at which Social Security can be claimed. In other words, there millions of women in the U.S. that are likely balancing family (perhaps to the tune of two generations) and work while entering the most financially crucial period of their lives.
Some points about women born between 1965 and 1980 are widely rehashed, such as the trillions in wealth they are already controlling or soon will control as well as the point that more than half of Gen X women are the lone chief financial and chief investment officer in their households. Obviously, those points speak to the need for advisors and Gen X women to improve their relationships,
What’s critical to fostering and nurturing those relationships is understanding the financial perspectives of Gen X because those viewpoints and subsequent goals and needs differ dramatically from their older and younger counterparts. Here are some tips for advisors wanting to improve connections with Gen X women.
Turning Dissatisfaction Into Satisfaction
Brie Williams, head of practice management at State Street Investment Management, points out that Gen X women are discouraged by their portfolios’ performances at higher rate than their baby boomer contemporaries, but that’s not a shot at advisors. Rather, it’s a commentary on the unique situation Gen X women are in.
Consider this hypothetical scenario. A Gen X woman has a career, she’s a mother and at least one of her parents is still alive. So she’s juggling her job, retirement planning, motherhood (college savings, etc.) and perhaps trying to aside cash for long-term care for her parent(s). As Williams notes, it’s no wonder some Gen X women are exhausted, financially speaking.
“Their exhaustion may reflect the complexity they are managing. Retirement readiness, longevity planning, eldercare support, education funding, liquidity needs and lifestyle preservation frequently converge at once,” observes Williams.” As the leading edge of Gen X enters their 60s, these financial coordination demands intensify.”
As the chart above confirms, Gen X women have a lot on their minds, financially speaking, and some of that burden can be alleviated by working with an advisor.
Why Advisors Should Care About Gen X Women
When it comes to any specific group, demographic, professional, etc., advisors’ level of attention and caring is often motivated by economics and there’s nothing wrong with that. Hey, advisors are running businesses, too. So with that in mind, consider the following.
Williams says 48% of Gen X women don’t work with advisors today. Based on the aforementioned estimate of how many Gen X women there are in this country, that works out to be 15.6 million women in this age group that are unadvised. Roughly speaking, that implies every advisor in the U.S. could take on 50 Gen X women clients. Alright so that’s not going to happen, but there are compelling economic reasons as to why advisors should prioritize this cohort.
“Research suggests wealth management firms that can attract, grow, and retain high-growth client segments—including Gen X and millennial women—could see up to four times faster revenue growth,” concludes Williams. “In an environment where client retention and intergenerational continuity are critical, raising the service bar for Gen X women is not solely a demographic strategy—it is a risk management and growth strategy.”