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Retirement Planning > Saving for Retirement

8 reasons you should be selling to Generation X

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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?

Worden: The images and the messaging used to reach gen Xers need to be made more relatable. As I noted earlier, there remains a huge focus among life insurers on the boomers. We see this, for example, in advertising showing retired couples walking on a beach or sailing a yacht.

These are attractive images, but not very relatable to the gen Xer who is saving for a child’s college education or providing care for an aging parent. When they see these marketing images or messages, they think, “They’re not intended for me.” But gen Xers do respond well to financial scenarios and examples in which people like them are being portrayed.

Also important is simplicity of the messaging: making a proposed solution less complex so that gen Xers feel that they can make an informed choice about a product or plan.

Hersch: The Weber Shandwick report references 8 strategies for engaging the gen X market. Among other guidelines, the study encourages providers to “bring the future closer” to gen Xers to encourage more savings, make sorting through investment options easier and considering healthcare costs as a separate line item in financial security planning. What factors guided the company in the development of these recommendations?

Worden: In a phrase, gen Xer’s unique life experiences. They entered the workforce when the economy and the retirement system were undergoing big changes, such as the rapid shift among employers from defined benefit to defined contribution plans; and when the adoption of new technologies, particular consumer electronics, was exploding. So the life experiences of gen Xers are very different from those of boomers and millennials.

Hersch: Did the report spur new questions that might be the basis for additional research in the future?

Worden: We want to explore whether gen Xers are overlooked to the same degree by other industries. Of particular interest are the automotive, consumer products, pharmaceuticals sectors.

This gen X report was entirely an internal initiative, one undertaken at a critical time to shine a spotlight on this demographic cohort. That said, we think that financial services providers will benefit by looking at the study’s findings in the context of their own sales and marketing efforts and determining whether they’re sufficiently tailoring their outreach to Gen Xers.

Hersch: Do you have any final tips for advisors looking to better customize their marketing efforts to gen Xers? Are there blind spots that advisors may be overlooking?

Worden: Help Gen Xers understand the urgency of retirement planning. With the oldest of the Gen X wave now turning 50, it’s really an ideal time for gen Xers to talk to an advisor and develop a plan, including strategies for meeting healthcare expenses in retirement. This is critical point of the study: Gen Xers really need to plan for the healthcare component separately.

Per my earlier point, advisors also need to be relatable and appreciate the stage of life that Gen Xers are in. As a group, they are a worthy prospect target: They want financial education and are open to receiving advice. So it’s very much worth the time of advisors and financial services companies to communicate with them — and to do so in a way that’s distinct, relatable and simple.


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