Gen X Stands as Greatest Wealth Window for Advisors
Gen Xers are anticipated to inherit the most assets among all generations within the next 10 years. As a result, financial advisors and wealth managers have an opportunity to connect with these clients.
Research from Cerulli Associates finds that Gen X households are expected to receive an average of nearly $1.4 trillion in the upcoming “Great Wealth Transfer”—where an estimated $124 trillion will flow to descendants and succeeding generations.
Cerulli notes that predictions show Gen Xers will represent the largest opportunity for advisory, investment, and retirement industries. According to past research from Hearts & Wallets, the Silent Generation will decline by 7.4 million households within the next decade, while 12.8 million households will be over 80 years old and 5.6 million will turn 85 or older.
As older generations age, a bulk of wealth will be transferred from the Silent Generation to Gen X, predicted the research.
The 2008 recession had stalled Gen Xers’ savings and investment growth, as many were in pivotal moments in their careers. Studies show that this group could never fully recover their savings from the fallout, due to a lack of stable retirement investments in their accounts.
“Gen X households have faced much more financial and career upheaval early in their financial journeys than had been expected. In fact, no generation lost a greater percentage of its net worth between 2007 and 2010 than Gen X households—their median net worth falling 38%, from $63,000 to $39,000,” says Chayce Horton, senior analyst at Cerulli. “With stunted market growth from 2000–2010, many Gen X households lack a sense of comfort with their future retirement.”
Coupled with balancing responsibilities, including paying down debt and providing care to children and aging parents, Gen Xers have struggled in keeping up with their retirement needs. With a surge of wealth incoming, the Sandwich Generation has an opportunity to expand on their savings targets.
“There is no shortage of areas for which Gen X households could find an advisor helpful—from mortgage refinancing to retirement or estate planning—especially if there is an inheritance on the horizon,” says Horton. “Cerulli finds a significant uptake in advice consumption and reliance on advisor assistance as investors move into their 50s. As Gen X is set to inherit more assets than any other generation in the next decade, these households represent the most immediate opportunity for wealth managers, and those who are not already positioned to gain traction with them will need to catch up.”
SEE ALSO:
Great Wealth Transfer an ‘Existential Threat’ to Advisors?
Gen X to Inherit Major Wealth Transfer Over the Coming Decade
How Advisors Can Prepare for the $124T Wealth Transfer
Is the Solution to the Retirement Crisis More Debt?
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
