Is the financial services industry ignoring Gen X?

July 12, 2016
3 minutes read

Gen X has been underserved by the financial services industry, overshadowed by the retirement planning needs of Baby Boomers and the long-term potential of the Millennials. But Gen X has financial needs, too, and many have enough resources to be of real interest to the industry. There is plenty of opportunity for financial institutions and advisors who pay Gen X the attention they deserve: seven in 10 Gen X worry about having enough money to retire comfortably and three in five believe that they need to learn about investing in order to be financially secure.

Gen X: the lost generation?

Caught between the larger and louder groups of Baby Boomers and Millennials, Gen X is often considered “the middle child,” neglected and overlooked by marketers in all industries. However, US Census Bureau estimates are that there are 50 million members of Gen X representing 15% of the population. While that is far fewer than the 80 million Millennials that represent one quarter of the population, Gen X has more money than Millennials and generally more sophisticated financial needs.

Lost opportunity?

With many turning 50 in recent years, Gen X are in their peak earning years, and the time for building substantial retirement savings is growing shorter. Because of this, they are more likely than members of any other generation to make regular contributions to their retirement accounts. However, many are also contending with significant competing priorities: raising families, purchasing homes, and saving for their kids’ college. There is a huge opportunity to help Gen X balance these priorities in ways that will help them reach all of their goals, including building a retirement account that will help them live the retirement life they want.

Challenges of Gen X

While there is plenty of opportunity among Gen X, there are also challenges. They are a bit cynical when it comes to financial services institutions and only half trust financial services institution to provide the resources necessary to achieve their goals. They are also difficult to reach as they are more likely than the general population to have ignored all financial services advertising attempts.

What to do?

Mintel’s Investment Trends US 2016 report finds that only half of Gen X is comfortable with their level of knowledge about investing. However, an overwhelming majority believe that the most important goal of investing is to provide for a comfortable retirement and over half believe that investing is the only way to achieve real wealth. Institutions can expand their reach among this forgotten generation by making them more comfortable with the idea of investing and by educating them about products that make it easier to balance their financial priorities as well as to make saving enough for retirement a realistic possibility.

What we think

Although smaller in size than other generations, Gen X offers substantial long-term opportunity to financial institutions and advisors. Helping Gen X find money in their budgets to increase their retirement savings can help build and cement relationships among this segment. Key to the success of any effort to engage Gen X will be the delivery system; they are most interested in in-person opportunities, such as in-branch workshops or open houses where they can meet personally with an adviser about how they can specifically help.

Robyn Kaiserman is a Senior Analyst, Financial Services at Mintel, researching and writing in-depth reports on the financial services industry. Her most recent topics include Innovations in Banking and Payments.

Robyn Kaiserman
Robyn Kaiserman

Robyn Kaiserman is a Senior Analyst, Financial Services at Mintel, researching and writing in-depth reports on the financial services industry.

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