A new research report from Cerulli Associates, “Overlooked Gem? The
Underserved Generation X,” finds that Gen Xers have received far less attention
from financial services providers than members of the Baby Boomer generation.
And it’s not just individual investors who are losing out as
a result; by structuring their offerings with only the categories of “Baby
Boomers” and “Millennials” in mind, many providers are overlooking the fact that Gen
Xers average more than $160,000 in savings each. People in this age range have
distinct financial needs and goals from either Baby Boomers or Millennials,
“During the past decade, financial advice and product
providers have made it a priority to focus on the Baby Boomer generation.
Rightly so, households in this segment average more than $400,000 of investable
assets and control more than $9.5 trillion,” states Scott Smith, director at
Cerulli. “On the other hand, the rise in digital advice platforms has caused providers to pivot attention to the ‘Next
Big Thing’ in investing: Millennials.”
Focusing on Millennials is positive for the long-term future, according to Cerulli, but the real sweet spot today for advice
providers looking to build a base of younger clients could be Generation X. The
generation includes some 35 million member households currently in control of more
than $5.7 trillion in investable assets.
“While their assets are increasing, many of these
portfolios are tied up in employer-sponsored retirement plans that limit their
appeal to traditional advisory channels,” Smith notes. “Instead of viewing
these as challenges, forward-thinking advice providers need to embrace Gen X to
reinforce the true breadth of their value proposition with respect to
comprehensive wealth management.”
According to Cerulli, reviewing existing retirement plan
assets and helping define long-term goals can both serve as useful entry points
into the discussion of comprehensive wealth management with Gen X.
“Many of the households in the Gen-X segment are entering
the most complex segments of their financial lives,” Smith explains. “Insights
from a comprehensive financial planner to weigh the complete financial impact
of decisions they face would greatly benefit Generation X.”
Given that the majority of Gen-X households believe it is
important to have a written financial plan, and looming regulations will
increase the importance of comprehensive planning in wealth management
relationships, the Cerulli research concludes it is essential that advisers and
providers optimize their platforms to address the needs of younger clients.
Information about obtaining Cerulli Associates reports is