Displaying items by tag: gen x

(New York)

Annuities have a long and complicated past that ultimately created a less-than-stellar reputation. However, over the last few years, the asset class has undergone a transformation of newer and better products, combined with better sales practices. Now, two big elements are creating a major tailwind for the product: growing demand from retirement plan inclusion, and aging demographics. According to TIAA, TIAA “nearly nine in 10 plan sponsors who do not offer in-plan guaranteed lifetime income annuities are at least somewhat interested in offering them” (from ThinkAdvisor).

FINSUM: Baby boomers are in peak retirement years and many don’t have as much saved as they would like, so annuities have a role. Further, Gen X is aging and likes annuities more than the Boomers, so they are presenting a very fertile market as well. Accordingly, many firms are seeking more annuities participation.

(New York)

If you asked almost anyone in the industry, the answer would be the same: it is Millennials with whom ESG investing is very popular, “we just can’t get older generations to care”. However, that is not exactly true. While Millennials get most of the credit for caring about socially-conscious investments, it is actually the generation above them, Gen X, which is doing the most ESG investing. A big part of this fact is down to the reality that Gen X is still richer than the younger Millennials. Millennials still win in terms of the overall percentage who buy ESG investments, but Gen X is seeing assets in ESG funds surge quickly. Gen X consists of anyone aged 39-54 years old.

FINSUM: This is a pretty interesting statistic and one that could be useful to some advisors who might be nervous to propose ESG options to those 50+. That said, the desire for ESG investing often comes from the client.

(New York)

The industry has been talking about it for years, but now it appears to be happening in earnest—advisors are finally targeting younger clients in force. While Baby Boomers dominate the industry’s AUM right now, 42% of firms say they are actively changing their marketing and networking to attract Gen Xers and Millennials. TD Ameritrade comments that “In just five years, RIAs expect 41% of their clients to be Gen Xers or millennials. This should be a wake up call to those who think that Next Gen wealth is literally still a generation away”.

FINSUM: The tide is really starting to shift and it is going to happen faster and faster over the next few years as Baby Boomers age and the wealth of the young grows.