For Advisors, Ample Demographic Opportunity Beyond Baby Boomers

Regardless of their own ages, advisors are largely conditioned to focus on a singular age demographic: Baby boomers.

Advisors aren’t to blame in this scenario. If blame is to be assigned, it’s on the mainstream financial media and any number of financial services companies that, for decades now, deployed advertising tactics designed solely to resonate with boomers and no one else.

Alright, I admit as a Gen Xer, I’m grinding a personal ax here, but I’m 44 years old and in all my years of watching television and reading Barron’s and the Wall Street Journal, I’m certain I’ve never seen an asset manager/advisory firm run an advertisement geared toward anyone but boomers. Worse yet, there’s scant media coverage of the lack of service geared toward other demographics that’s so pervasive in the advisory business today.

That’s problematic on numerous levels, not the least of which is the simple fact that Gen X and millennials need and want financial advice. With that in mind, advisors should examine the details of a new survey.

The Survey Says…

Last month, Global X polled 621 Americans on their investing views with an emphasis on generational differences. Kudos to the exchange traded funds issuer because the survey paid ample attention to Gen X and millennials.

I’ve long argued that advisors should be paying added attention to Gen X for a simple reason. No , not because that’s my generation, but because of simple math. Simple math meaning that if the well transfer from baby boomers to other generations is such a big deal to advisors (it is) then it makes sense to focus on the oldest heirs to boomers. Hint: That’s the upper levels of Gen X, likely folks in the 50-57 age range.

I digress, but there are vital takeaways from the Global X survey.

“Both Millennial and Gen X investors surveyed overwhelmingly prefer guidance from financial advisors on increasing managed assets,” says Mayuranki De of Global X.

The poll also turns some other important information for advisors. Succinctly put, if you’re advisor looking to earn business from Gen X and millennials, it’s a good idea to bolster your tech and social media proficiency.

“Both generations surveyed prefer to work with financial advisors that are technologically inclined—with an emphasis on online portfolio tools,” adds De. “Although many survey respondents are connected to their financial advisors across an array of social media platforms, the most popular for both the Millennial and Gen X demographics were Facebook, followed by Instagram.”

In fact, social media can provide valuable insight into the financial needs of Gen X and millennials because, be it Facebook or Instagram or the like, that’s where so many members of these demographics go to highlight change of life events, including new jobs, marriages and –forgive me for being gloomy – deaths of boomer parents/relatives.

Other Interesting Findings

Another important issue turned up in the Global X survey is that the type of investments long thought to be acceptable to boomers aren’t going to cut it with younger demographics.

Gen X and millennials are unlikely to applaud advisors for drumming up a 60/40 portfolio consisting of a broad market index fund and an aggregate bond fund.

“At least 50% of Millennials surveyed displayed interest in Thematic Investing,” notes De. “Gen X and Millennial Survey respondents showed sizable interest in both long-term demographic trends and companies that aligned with their personal values.”

Bottom line: Advisors that want to win business from Gen X and millennials need to know how to communicate with these groups and know that it’s going to take more than the most basic investing strategies to attract and retain these demographics as clients.

Related: The 411 on 529 Plans