There is not much evidence that pirates buried treasure, says straightdope.com. And treasure maps are more prevalent in fiction than reality, according to Wikipedia; Robert Louis Stevenson is credited with making popular the “X marks the spot” concept in his book, Treasure Island.
Treasure maps are interesting literary devices. They provide motivation for a quest, define a path to success, mark progress as a tale unfolds, present ongoing challenge to characters as they decipher clues, and create further conflict as villains compete with protagonists.
Generation X needs a treasure map, according to research findings. And help in understanding financial “clues.”
“Generation X is actually the most at-risk financially,” says a recent survey by Financial Finesse. Xers confront competing financial priorities: college expenses, their own retirement, and realities like lower Social Security payouts, growing health care costs, fewer employer benefits, and longer life expectancy—challenges unique to this generation.
This week, learn more about Gen X consumers. Consider how you can motivate them on their financial quests, help map plans for success, show progress they make on the journey, and assist them in resolving financial conflicts.
‘The problem is not the problem. The problem is your attitude about the problem.’--Captain Jack Sparrow
To help Generation X—those born between 1965 and 1980—you need to know the demographic.
Explore “10 Things Generation X Won’t Tell You,” according to MarketWatch. GenXers are worse off than prior generations at this age.
In 2010, generation X’s assets were twice their debts—much lower than the silent generation, which had assets 27 times their debts, and baby boomers, which had assets about four times higher than their debt.
Many gen Xers bought homes just prior to the housing crisis and still suffer as a result. Between 2007 and 2010, median net worth for this generation slipped by 45%.
In 2013, half of this generation indicated shortfalls in retirement saving. Seven percent had no savings, and 11% did not have retirement goals.
On the job, baby boomers blocked advancement for Xers. Further, ambitious millennials covet leadership roles while jaded Xers “are somewhat agnostic about getting ahead.”
“College Debt Leaves Generation-X Grads Less Wealthy Than Parents,” notes newsmax.com. A Pew report shows college grads in Gen X hold more debt than their cohorts without a degree; $13,000 in debt compared to $6,000.
In all, three-fourths of gen Xers have family income exceeding what their parents did, but merely 36% had surpassed parental wealth.
“Generation X Women Are Least Confident in Their Financial Future,” Forbes reports. Boomers are more apt to consult a financial pro than gen Xers (45% vs. 31%). Millennials are more interested in reducing debt, buying homes, and meeting other financial goals.
Plus, 24% of millennials want to “start or grow a small business” compared to 16% of gen Xers.
“Generation X Workers: Retirement Reality Bites Unless Answers Are Implemented,” warns a TransAmerica Institute report. Here, 57% of Generation X workers say they are recovering from the recession, but only 12% believe they have fully recovered.
The recession hit hard: 74% report a negative impact. Twelve percent experienced layoffs, 25% took pay cuts or reduced work hours, 35% experienced home value declines, 37% had slips in investment portfolios, and 4% lost homes.
Only 24% say retirement is currently their biggest financial priority. Instead, 48% concentrate on financial need like “paying off debt” (27%) or simply managing the cost of living expenses (21%).
“Thirty-four percent… expect their standard of living to decrease when they retire.”
The group is willing to learn, however. Sixty-five percent want more assistance from employers on reaching retirement goals, and 58% want saving and investment advice. Forty-four percent would ask advice but make their own choices, while 14% want someone else to make decisions for them.
Only 35% currently use a financial advisor.
Now on deck…
A recent National Association of Realtors survey says “Gen X homeowners represented the largest share of sellers in the past year (27%).” That’s good news for them as these homeowners “were the most likely to have wanted to sell earlier but were stalled because their home had been worth less than their mortgage.”
It is expected Gen X small business owners will increasingly use a financial advisor, according to a Securian Financial Group study. Four in ten currently consult an advisor; it is anticipated this will grow to 60% for both personal and business needs.
One challenge is that Gen Xers hesitate to share business information, and few “find financial advisors easy to do business with.”
This interesting study provides perspective on the way Xers view personal finances in comparison to business financials.
Hoist the anchor
The “Industry needs to start talking to generation X now,” says ftadvisor.com. “They are… not really thinking about [retirement] at all…I think the industry needs to start talking to them right now…because when they get to that point [of age 55] they are really going to be in trouble.”
Indeed, “Now is the Time to Snag Gen X Clients,” echoes Investopedia. Gen Xers are “do-it-yourselfers,” notes the article. You must “figure out how to gain their trust.”
More advice on “How Financial Advisors Can Attract Gen X Clients” is found from Commonwealth Independent Advisor.
This resource suggests leveraging existing relationships with relatives, projecting a “vibrant, unique online presence,” fostering partnerships, holding informational events, and establishing a focus group to generate referrals and grow your understanding of these consumers.
Noted Robert Louis Stevenson, “I am told there are people who do not care for maps, and I find it hard to believe.” Research seems to indicate Generation X has need for and is receptive to financial planning assistance.
Be the institution that helps “X mark the spot.”
LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora and visit the CUNA blog, “The Research Roundup: Economic Perspectives.