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It stands to reason that baby boomers and many Gen Xers will walk into an advisor’s office with more assets. That’s the result of being alive and working longer than their millennial and Gen Z counterparts.
That’s not a criticism of younger folks. The math is the math, but there are some ways in which more youthful clients and investors have their more seasoned contemporaries beat. A prime example is the willingness of younger people to have money conversations in romantic relationships and do so early on.
Impressive when considering financial chats between couples are still considered taboo. What’s all the more stunning about the extent to which couples are reluctant to discuss finances are the various studies confirming the “forbidden” nature of money talks is applicable to couples of all types and the surprising point that the relationships’ participants would rather discuss their partners’ past sexual trysts than talk about money.
The good news is that the forbidden aura of money talks seems to be something more prevalent with people north of 40 years old. Better still is the point that as that taboo fades with younger people, they could set themselves up for better financial and marital success. They might also be making life easier on advisors in the process.
Younger Generations Prioritize Financial Transparency
Arguably, financial transparency is an under-discussed topic, but it’s not a hard sell. Transparency is one reason why so many investors embrace exchange traded funds. Likewise, lack of transparency is a prime reason why clients fire advisors. Believe it or not, there are parallels with romantic relationships.
“The younger generations also appreciate financial transparency more than the older ones. Half of both Gen Z and millennials find it attractive when a casual date is open about how much money they make, compared to just 37% of Gen X and 23% of baby boomers,” according to Talker Research.
The study was conducted on behalf of banking app Chime . Keeping with other research suggesting that finances are often addressed in clandestine fashion, if at all, in dating scenarios, younger people prefer to discuss more intimate topics over finances with dating prospects, but the margins are small compared to what’s seen with older folks.
“Still, finances ranked in the top three most stressful conversations to have with a date,” adds Talker. “While relationship history (29%) and sex (26%) ranked as the top two, finances (25%) didn’t fall far behind, even outranking religious beliefs (17%), marriage (12%) and kids (11%).”
Still Some Work to Be Done
The Talker survey also indicates 31% of those polled said personal finances should be discussed somewhere between the first and third dates. Boomers and Gen Xers are likely to think that’s ambitious, if not tacky, but give the younger folks credit. They’re prioritizing finances and some clearly want to get those uncomfortable conversations out of the way early.
However, they’re not perfect. Talker points out 34% of those queried believe financial conversations should be left for when a committed relationship is formed. That might be the polite way of doing things, but it also invites rude awakenings down the road.
“Americans are divided over the ‘right’ way to talk about who pays for a first date, and whether it should be on the actual date (37%) or a message before it even begins (31%),” said Janelle Sallenave, Chief Spending Officer at Chime. “With so many Americans feeling anxiety over the payment situation, discussing expectations beforehand can alleviate awkward moments.”