Sandwiched between two of the most talked about generations — baby boomers and millennials —is Generation X (defined as individualsborn between 1965 and 1980). Today,Gen Xers are spending more, saving lessand struggling with increased anxietyabout retirement planning, protectingcurrent levels of wealth, and the risingcosts of healthcare.
Yet Gen X households will inherit anestimated $31 trillion over the next 25years, according to Cerulli Associates,and as wealth accumulates, so does theneed for financial advice.
The wealth management industry ison the brink of a massive transformation and advisors need to be prepared.By 2030, at least 80% of advisors willoffer goals-based advice and will “shedtheir role as investment managers andbecome more like ‘integrated life/wealth coaches,’” according to recentresearch by McKinsey. To remaincompetitive, financial advisors needto evolve their practices and establishpartnerships with specialists acrossmultiple disciplines.
Property and casualty insurance isone area that is often overlooked in thefinancial planning process. Chubb datahighlights, 77% of clients expect theiradvisors to provide support on P&Cmatters; however, only 28% do. By partnering with insurance agents, advisorscan solve for this “expectations gap” andprovide a more robust risk managementassessment by taking into account bothinvestment and insurance-related risks.
Advisors need to be proactive anddeliver a seamless client experience,
especially due to this generation’s self-reliant tendencies. GenXers expectprompt replies, transparent interactions — and that advisors fully understandtheir unique needs, according to Cerulli.Unlike other generations, many GenXersface increased responsibilities: caringfor elderly parents, providing financialassistance to adult children, paying downdebt, all while working full time.
COLLABORATING WITH SPECIALISTS
Annual client reviews are an opportunity for financial advisors and insurance agents to collaborate and provideGenXers with advice and solutions thataddress their specific needs. Life events,such as job changes, milestone birthdays and shifts in family dynamics, alsotrigger the need to reassess insuranceneeds. By teaming up with an independent insurance agent, advisors are betterequipped to proactively identify gaps,help their clients secure proper coverage, and stay on track.
Let’s take a look at some potentialscenarios that could surface pockets ofhidden risk and potentially derail retirement or other significant financial goals,if left undetected.
5 OPPORTUNITIES TO OPTIMIZE
COVERAGE FOR GEN XERS
1. Marital Status: Client remarriesand moves into spouse’s home. How isthe client addressing insurance coverageacross residences, vehicles and other personal property? Reassess liability coveragelimits and the potential cost savings fromconsolidating policies with one insurer.
2. Career: Client receives a job promotion and makes permanent homeimprovements. Did the individual notifythe insurer of the renovation and updatedwelling limits to reflect coverage?
3. Living Arrangements: Client purchases a multigenerational home andstarts caring for elderly parents. Willdomestic help be hired? If so, exploreemployment practices liability insurance coverage and make sure there isinsurable interest to ensure claim payouts to the correct people.
4. Milestone Birthdays: Client turnsage 50 and is gifted jewelry or fineart. Has the item been appraised andinsured against damage, loss or theft?
5. Wealth Accumulation: Clientreceives inheritance and purchases asecond home. Where is the home located?Assess policy coverage and plan for climate-related risks that are not covered understandard policies (e.g., flooding, wildfires).
Planning for the expected and preparingfor the unexpected is a collaborative effort.Advisors — now is the time to establishpartnerships with independent insuranceagents and build relationships with GenXers before other advisors do. This is oneopportunity that cannot be overlooked.
Fran O’Brien is division president, NorthAmerica Personal Risk Services, Chubb. Shecan be reached at AskFran@Chubb.com.
WEALTH & RISK
By Fran O’Brien
Ways to Connect With Generation X
Advisors must find new ways to attract the next generation of wealth, and
hidden in plain sight is a group desperately needing advice.