Bridging Generational Investing Goals, Circumstances And Preferences

There is a significant body of research on the key generational differences in spending, saving and investing. While there is some disparity around which birth years define each generation, as a financial advisor, you are likely anecdotally aware that each generation—the Baby Boom generation (1946-1964), Generation X (1965-1980), and Generation Y (a.k.a. millennials [1981-1997])—may have distinct outlooks, financial goals, circumstances, preferences and tendencies when it comes to their finances. That’s natural, as each generation has been influenced by different economic events that have shaped their financial attitudes and beliefs.1

But how does this, or should this, impact your investment philosophy, client service model and your investment inventory?

Here are some of the investing trends across generations, including similarities and differences, as well as potential opportunities for financial advisors.

Generational similarities

A 2017 survey of investors of all ages by BMO Wealth Management found the majority of those surveyed choose to work with the assistance of a financial professional, with 28% using an advisor at a financial institution, 23% investing through an independent advisor and 18% investing with a full-service financial professional.2

A separate 2017 study by Stash Financial, Inc., found that saving for retirement was the top investment goal among baby boomers, Gen Xers, and millennials.3 But why this is a high priority differs depending on the group.

  • Baby boomers: In this group, many have entered retirement or will be doing so soon. They recognize the shorter time horizon they have for accumulating assets.
  • Gen Xers and millennials: The younger generations have been inundated with information on the importance of self-funding retirement due to the phasing out of defined benefit pension plans, the increasing adoption of defined contribution plans and a general skepticism about the sustainability of government-sponsored retirement support (e.g., Social Security or the Canada Pension Plan).
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These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions ...

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