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For years, most financial professionals have been fixated on Baby Boomers – and for good reason. This group of nearly 80 million Americans born between 1946 and 1964 – 26% of the entire U.S. population – has been a huge windfall for advisors. As Baby Boomers have been nearing retirement, many advisors have partnered with them to create successful plans to secure their financial futures.
But the inevitable fact is that this windfall will end.
That’s because every day for the next 19 years, some 10,000 Baby Boomers will reach retirement age, moving their assets from accumulation to distribution. Financial professionals will lose these assets, so how do they go about replacing them?
Many financial advisors are playing a losing game. They need to change the rules quickly in order to ensure their long-term success.
The solution is easy to identify but difficult to put into practice: advisors must target younger consumers, those popularly known as Generation X and Generation Y. Gen X is made up of Americans born roughly between 1965 and 1980, a group of some 46 million people. Gen Y, also known as the Millennials, is comprised of consumers born roughly between 1981 and 2000 – about 78 million people more. The good news is that, combined, these two groups represent an even larger population – and opportunity for advisors – than Baby Boomers once did.
The bad news is that these generations behave much differently than Baby Boomers, and they act differently from one another. Financial professionals will need to change their tactics when working with these groups.
