Other parts of this series:
As I was exploring gender diversity in the workplace, the topic of my previous blog series, one of the themes that surfaced was how generational factors influence both the financial services marketplace and workforce. For example, a customer’s financial services needs are very much impacted by their life-stage. Financial services professionals must be cognizant of these generational influences in order to effectively serve customers at all life stages.
Behaviour matters more than demographics
Typically, we define today’s generational divides along age-based demographic lines: Baby Boomers are roughly 50-70 years old, Generation Xers are 31-49 years old, and the largest group—Millennials—are 21-30 years old. But it turns out there’s another way to look at generational divides, and it has less to do with demographics and more to do with behaviours. Those behaviours can lead to market opportunities.
In late 2012, Accenture conducted a study that identified an emerging market segment—dubbed Generation D (or “Gen D”). Gen D is comprised of about one-quarter Boomers, one-half Gen Xers, and roughly another quarter Millennials. At that time, this segment represented more than 75 million people in the United States (about 44% of the population) and close to $27 trillion in assets. It turns out this non-homogenous group has shared characteristics that financial service providers can leverage to increase profitability while growing wealth for their customers.
What sets Gen D apart
So what makes this market unique, gives it value as a financial services growth engine, and what can financial services and HR professionals can do to prepare your workforce to tap the benefits this emerging and potentially lucrative market segment offers?
Key findings from the Accenture study show that Gen Ders, as a group:
- Are very active investors with higher incomes, education levels, and assets
- Lead a deeply digital, always-connected lifestyle and rely on technology to manage their wealth
- Participate in social media daily, particularly Facebook
- Seek investment information online, consulting an average of four different investment websites
- Tend to distrust financial advisors in general and prefer to independently validate investment advice
- Are looking to mitigate risk, and lean toward more conservative investments
That being said, although Gen D can be characterised by these general traits there are distinctions between the sub-segments. In my next post, I’ll explore these distinctions and the implications for the financial services industry—especially as the population shifts over time. I’ll also describe missteps the industry has taken in failing to address this valuable market segment. Lastly, I’ll provide recommendations on how to correct those missteps.
For more information, please see:
Trend two in the Accenture Technology Vision for Insurance 2016 report – Liquid Workforce: Building the workforce for today’s digital demands