As retirement advisors kick off their marketing and prospecting campaigns for the 2015, they would do well to customize their efforts to a demographic group that often receives less attention than others: generation X. So insists Brooke Worden, senior vice president of financial services at Weber Shandwick, who spearheaded a new study on the 65 million Americans born between 1965 and 1982. LifeHealthPro Senior Editor Warren S. Hersch recently interviewed Worden to examine key findings from the report, "Leveraging the Gen X Retirement Market: From Overlooked to Opportunity." The following are excerpts.
Hersch: What prompted Weber Shandwick to research gen Xers and their future retirement needs?
Worden: When reviewing the industry's retirement research studies, we noted a heavy emphasis on the nation's two largest demographic groups: boomers and millennials. Gen X, in the middle, is often overlooked because it's not as large a cohort. The generation spans 16 years — versus roughly 20 years for other generations. And Gen Xers represent a smaller share of the population: 65 million, versus 77 million boomers and 83 millennials).
As stated in the report, given the financial security that this generation will require to sustain itself during its retirement, we believes that Gen Xers present an opportunity that financial services companies should not overlook. This "middle child" cohort has financial issues and communications needs that are unique to their experiences and their place in history; and that deserve a closer look by the financial services industry.
Hersch: Did the findings of the research largely conform with your expectations or were there surprising results?
Worden: One thing that was surprising to us was how optimistic gen Xers are: They very much view their situation has a glass half full. Gen Xers, the oldest of whom turn 50 this year, have been characterized as slackers or cynical. To the contrary, we found that they are, in the aggregate, time-pressed and stretched thin in terms of their work demands.
Another big surprise for us is the level of anxiety they feel in respect to future financial needs. There is a generalized concern among gen Xers about whether they're doing enough to prepare for retirement and growing healthcare costs as they age.
Hersch: Should gen Xers be viewed as a single bloc? Or are there differences in their priorities and perspectives, particularly between older and younger gen Xers?
Worden: There are indeed differences. Older gen Xers tend to prefer in-person meetings with a financial advisor, whereas younger gen Xers are more comfortable using technology to facilitate meetings and information-sharing remotely. That might happen, for example, via Skype, FaceTime, YouTube or other social media. Advisors need to be able to leverage these channels to connect with gen X clients and prospects.
Hersch: The report observes that only a "handful" of gen Xers are looking into long-term care insurance. What do you think is needed to generate more interest in the product?
Worden: Long-term care insurance, if marketed at the worksite, could hold significant appeal for them. Especially promising in this space are affordable linked-benefit products that add a long-term care rider to permanent life insurance or an annuity. Also promising are flexible "shared care" products that reduce the cost of long-term care insurance by allowing a couple to share a pool of benefits.
Hersch: What other changes does the industry need to undertake to better serve the needs of gen Xers?
