How different generations invest can affect your financial marketing strategy

Financial marketing strategy

While each generation is different, all of them are crucial to your growth as a financial firm.

Financial services marketing often focuses on the silent generation (born between 1925 and 1945). They are perceived as ‘low hanging fruit’ investors with the greatest wealth. Although, it is worth noting that Gen X, Y, and Z are all investing heavily and planning for their long-term financial futures.

Marketing Strategy

In 2020, market volatility brought new investors to the stock exchange to take advantage of its opportunities. These new investors, with a median age 35, represent 15% of all those currently investing in the stock exchange. This is staggering, considering before 2020, the average investor was 48 years old. 

When it comes to financial marketing strategy, we need to remember that not all investors are the same

If you segment your target audience by their age, you will see trends start to emerge. Doing this will help you determine the best way to reach them, but will also show you what financial topics are most important to them. These are some of the interesting trends that we see in the market for Gen X, Baby Boomers, Millennials and Older Gen Z.

Baby Boomers: The risky investors

Financial professionals often recommend investors shift their money into safer allocations as they near retirement. However, as many as 8% of baby boomers are fully invested in stocks. Not the safest move!

Nearly half of baby boomer investors opt for riskier investments than what a financial adviser would recommend. Many of them work with trusted advisers and are loyal to them, not wishing to transfer their money to another firm.

Gen X: Straight talking investors

This generation is more likely to speak with a financial professional to discuss their investment desires. Don’t assume these people are looking for the same level of one-on-one support as their grandparents and parents. They are actually seeking a financial expert to help them achieve their goals. They may want a little less contact, and when they do, a text or voice note may suffice. 

T. Rowe Price recently conducted a study that found 60% of Gen X and millennials want a “financial coach”, someone who motivates and gives steps to reach their financial goals.

This generation’s younger members are busy saving and earning, while simultaneously worrying about their children’s future funds. Perhaps the older generation is beginning to think about early retirement.

Gen X investors, regardless of their age, expect fast and accurate information from financial advisers they can trust.

Millennials (Gen. Y): The conscious investors

This group is responsible in large part for the dramatic increase in socially-focused investing. They actively search for companies that place a strong emphasis on sustainability, governance and social (ESG) investments.

They are more likely to conduct their own research and consult with their peers before making their investment decisions and are also more likely than others to consult forums or listen to trusted podcasts to enhance their investment knowledge. Therefore, don’t be surprised if they’re already pretty clued up with how they want to proceed before your initial conversation. 

Generation Z: The digital focused investors 

Young professionals are the oldest members of this group. They are just starting to invest. Gen Z is the most likely generation to contact a financial adviser out of all the ones studied.

Broadridge Financial Solutions found that 39% of millennials are currently working with a financial adviser, with 65% planning on starting in the next two years.

Only 23% of Gen Z respondents plan to work with a financial adviser. They are more likely to trust advice from family and friends than information on traditional investment sites.

Financial institutions should not ignore this generation, even though they may not have the same investment weight as their older counterparts. Gen Z investors don’t wait for things to happen. A 2021 21st Annual Transamerica Retirement Survey found 70% of Gen Z investors have already started saving for retirement. This means their median age to invest is just 19!

On the other side, Millennials didn’t begin saving for retirement until they were 25 years old (still quite young, but each year can have a significant impact on compound growth).

Baby boomers and Gen X didn’t begin saving for retirement until they were 35 and 30 years respectively – which just showcases future possibilities. This information indicates that Gen Z investors are driven to actively plan for their financial futures to enjoy more retirement savings down the line.

How do these generational shifts impact marketing for financial advisers?

We are at the threshold of major change. This will be the largest intergenerational wealth transfer ever, with $30 trillion expected to change hands in the next few decades. Your marketing must adapt to this and keep up! 

Because they are the wealthiest, the baby boomers have been the centre of marketing efforts for a long time. This is changing as they age or get closer to the end of their lives.

A Morgan Stanley survey shows that aging baby boomers pass money on to Gen X and millennial children. Gen X investors have seen their wealth increase since 2016, when they reached their prime earning years in a bullish market. This generation is older and has children in their late teens. They actively contribute to their retirement funds while paying off mortgages. They are looking for financial professionals who can help them achieve their goals.

Generation Z and Millennials are increasing their investments and exploring other investment topics. Financial advisers should now connect with these groups to build long-term partnerships.

A recent study of more than 400 financial advisers found that only 11% targeted millennial investors. Focusing on millennials’ investment needs is a missed opportunity, as they are the largest segment of the population, and as we have just discovered, they are hungry to invest!

Creating a multigenerational marketing strategy 

We believe Gen X, millennial and Gen Z investors are the best focus, given the data we have uncovered. Next, we need to know how we can reach them and what topics they are interested in.

We will cover this in the following blog, delving deeper into how we can market these individual investor profiles. Do you want to learn more about marketing to multi-generational audiences? Maybe you want to branch out into a new demographic? Our team is ready to help you develop a financial marketing strategy for a multi-generational audience.

Read our comprehensive guide to creating a financial marketing strategy in 2022.

Marketing for financial advisers guide image