The survey reveals generational differences in attitudes about and understanding of investing that have implications for the role advisors can play in helping clients prepare for retirement, the report states. In particular, Welling says the survey found that advisors concerned with inter-generational financial planning would do well to be aware of the unique perspectives and needs of the generations, so they can play an active role in bridging generations that are as different as iPods and vinyl records. Specifically, understanding how Gen Y members think will help advisors prepare their business for this group before they reach retirement age. Fortunately, the retirement-planning future may very well be a bright one, since Gen Y is open to education and is well aware that they can't look to government plans for retirement income.
The data collected by Harris Interactive found that members of Generation Y are more likely to say they will need to use their own financial resources for retirement (61% vs. 42% of boomers). Additionally, 31% fear they will have to help support their siblings compared to 26% of all respondents, and more than half (53%) worry about having to support their parents. Furthermore, while there is a general lack of trust in all traditional sources of information for financial security during retirement, financial advisors do score a bit higher among respondents of all generations compared to other sources like brokerage firms, insurance companies, banks, and even family or friends. Respondents from Generation Y have more trust in professional advisors than respondents in all the other generations.
"I think Gen Y, especially, are realists," Welling says. "They expect that they are going to need to fund a lot of their financial future themselves."
What Retirement Means
The study also exposed a split in how Americans currently think about retirement. Nearly half (45%) of survey participants see retirement as a time to give back to their family and community. "This dynamic may be due in part to seeing a gap of potentially productive years between retirement age, which they define as 63, and 'old age,' which they say does not start until around 75," according to the report. But 55% plan to focus on their own needs in retirement.
"This cross-generational study shows us the radically different ways future generations expect to live in and approach retirement," said Ken Dychtwald, president and CEO of Age Wave, in announcing the results. "Our current retirement systems and networks aren't set up to meet their expectations as they alternate between periods of work and leisure, and they may find themselves at the center of a complex set of relationships where they care for parents as well as siblings."
When it comes to aiding these individuals in retirement, Welling believes that an advisor's success will depend on whether or not an advisor knows who their business is built for and their target client. "We encourage advisors to not try and be everything to everybody, but to focus on the clients they can serve best," he says.