Superheroes come in all shapes and sizes. Like many children of the 70s and 80s, I learned that from the X Men – those individualistic, resilient and adaptable superheroes. To me, those characteristics also describe the children of the 70s and 80s – particularly the women of Generation X or the X (Wo)men! As researchers have begun to focus on the emerging consumer power that is Generation X, these women are being described as “savvy, skeptical and self-reliant.”1
But, when it comes to investing we see a slightly more vulnerable side: most X (Wo)men want and need financial advice. An advisor who can demonstrate that they understand these women’s needs and can make their lives easier, will likely succeed in acquiring and engaging these types of clients.
Gen X Women
The women of Gen X currently fall between the ages of 32 and 47. Many are highly educated, technologically savvy and ambitious. They have a lot going on in their lives, facing scores of constant demands. Many of them are working and married, juggling responsibilities for their jobs, their children and their own parents. In that sense, “Sandwich Generation” may be an accurate description for this generation that is sandwiched not only between the oft-discussed Baby Boomers and Millennials, but also between raising kids and caring for aging parents.
Women of this generation generally value self-sufficiency and are highly resourceful. When time is short, many seek professional advice and expertise that simplifies an area of their lives: outsourcing comes to the rescue for many (hello, cleaning services!). In fact, Generation X consumers spend 78% more on personal services of all kinds than the average across generations.2
How do these traits play out in the financial realm of Gen X women’s lives?
What Gen X Women Want from an Advisor
In a study Russell published in 20143, we found that
- Gen X women are taking on more responsibility for investing than women of previous generations ever have. Indeed, 29% of Gen X women said they have more responsibility for investment decisions than their spouse or partner and 52% said they have the same level of responsibility as their spouse or partner
- Gen X women’s primary investment concerns are about retirement income and the ability to fund health care expenses
Gen X women are seeking guidance from an advisor who is able to
- Communicate how their investment recommendations are tied to their concerns
- Adapt explanations to their level of knowledge
- Explain how decisions today may affect them in the future
The good news is, there is definitely a need for advisors – and many Gen X women are receptive to it. While they’re highly concerned about their financial security in retirement, only two in five Gen X women have a formal plan for how to accumulate money.4 The opportunity is there, for advisors who are willing to engage with these women on their terms.
The Bottom Line
Women can represent a substantial opportunity for advisors. Just remember when you’re engaging with Gen X women, you’re dealing with an audience that tends to be independent, educated, self-reliant and tech-savvy. You may consider focusing on the retirement income conversation or help them develop a plan to support children and aging parents. But whatever you do, listen to them and demonstrate you’ve heard them by clearly showing the link between your recommendations and their short-term and long-term concerns and goals.
3 Russell Investments, “What really matters to women investors: exploring advisor relationships with Gen X and the Silent Generation,” January 2014.
4 Russell Research: What Really Matters to Women Investors. February 2014.
Information for this study was gathered through 16-minute (on average) online interviews with a total of 501 women in Generation X and 400 women in the Silent Generation. In order to qualify for the study, potential respondents were required to: Have at least $100,000 in investable assets (Gen X); Work with a professional financial advisor; and be between the ages of 32 and 47 (Gen X).
Jaylene Howard is a consulting director for Russell Investments’ U.S. private client consulting group. To see this post in its original form, with more information and full disclosures, visit Russell's Helping Advisors blog.