Why Advisors Should Connect With Gen X, Millennial Women

In the financial advisory industry, Gen X and millennials are often pitted as adversaries. Alright, that’s a bit of hyperbole there, but the reality is many asset managers have ingrained into advisors marketing strategies that ignore Gen while pushing focuses on other generations.

That’s a risky way of conducting business, particularly when considering Gen X is the generation that is the first beneficiary of the great wealth transfer. Fortunately for advisors, there are similarities between Gen X and millennials that can make connecting with these often disparate groups more efficient.

Better still is the point that women across both generations face many of the same financial quagmires and have similar financial goals and needs. Perhaps allaying advisors’ concerns is a recent report from Spectrem Group that indicates views on major life milestones, money and related matters among Gen X and millennials really aren’t as different as previously thought.

We covered that survey here. Here’s where things get even more interesting. Another survey suggest female Gen X’ers and millennials are feeling pensive about their financial outlooks and retirement savings. That says advisors are needed and have substantial opportunity to build important relationships with prospective clients in those demographics.

Gen X, Millennial Women Looking for Financial Guidance

An American Century survey conducted in late 2022 of 1,007 women in the 30 to 46 age bracket, which spans Gen X and millennials, indicates women in that age group are excellent candidates for elevated levels of financial education and bespoke advice.

“Not knowing how much to save for the future is a big obstacle for women, according to the study. Twenty percent of women indicate they don't know how much they will need in the future, and over 70% of women express they are not saving enough. When it comes to saving in general, many women think they are behind – even among those who are saving. Fourty-four percent of women save less than $50K a year, and 26% aren't saving anything,” according to the survey.

There are some bright spots for advisors to consider when working with Gen X and millennial women. For example, 70% participate in employer-sponsored retirement plans to some extent. Thirty-eight percent have either a Roth or traditional IRA. Translation: Women in these generations are prioritizing retirement savings.

On a somewhat related note, American Century asked the women polled how well they’d be able to explain to a friend 13 relatively basic financial terms with the highest percentages of affirmative responses to “employer match” and “stocks.”

On the other hand, signaling opportunity for advisors, 29% said they could not ably articulate any of the 13 terms while just 8% said they’re comfortable describing “asset allocation.”

More Retirement Insights

As noted above, women in the 30-46 age group see the value in saving for retirement. Where advisors can add more value is helping them strategize to effectively boost how much of their earnings they’re directing to retirement because data confirm help is needed on that front.

For example, just 10% of those surveyed are saving 10% or more of their salaries for retirement while 28% aren’t directing any money at all to retirement accounts. Just 9% of women in this age bracket have $100,000 to $250,000 in retirement savings.

Seventy-one percent of those queried said they believe they are NOT saving enough for retirement. That’s a sign that when it comes to working with younger female clients, advisors don’t need to focus on adventurous or exotic near-term investments, but rather shift the emphasis to retirement outlets.

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