Generation X hasn’t lost its trademark cynicism, according to a State Street Global Advisors’ survey, with only 42% agreeing it is better to have the guidance of an advisor than doing it themselves. It’s compared to 63% of Millennials.
“Gen X’ers are the most concerned with rising inflation, with 88% reporting that inflation is a top concern.”
However, the survey also found among those currently working with a financial advisor, “the vast majority say their advisors’ insight and guidance is valued even more today and has helped them remain confident during this period of rising inflation and market volatility.”
Inflation-induced stress and anxiety influence investor behavior when it comes to short-term budgeting and committing to long-term financial goals.
“The top two questions advisors are hearing from their clients today are, ‘Is now a good time to invest?’ and ‘How can I protect my portfolio against inflation,’” Allison Bonds, head of Private Wealth Management at State Street Global Advisors, said in a statement.
The survey revealed that about three-quarters of those working with a financial advisor had discussed inflation with their advisor, including how inflation will impact their investment goals in both the short and long term. Furthermore, nine in ten say they value their financial advisors’ knowledge and guidance even more in these uncertain times, and 86% believe their advisor has helped them remain confident in this period of rising inflation and market volatility.
Are advisors earning their keep?
The top two reasons Gex X balks at working with an advisor are 1) they prefer to have complete control over their investment decisions (46%), and 2) they don’t trust that financial advisors have their best interest in mind (41%).
Gen X’ers are the most concerned with rising inflation, with 88% reporting that inflation is a top concern. Given the majority are also worried about their ability to afford retirement and staying the course with their current investment strategy, now could be an opportune time for this generation to be more proactive about seeking help from a financial professional.
“Advisors have an opportunity to cultivate trusting, collaborative relationships with Gen X clients who want to remain involved in making their own investment decisions to a greater extent than other generations,” Bonds added. “Gen X’ers are in their peak earning years and in the accumulation phase of their financial planning, yet juggling multiple financial priorities. This generation is currently sandwiched between caring for their children and aging parents. Gen X is more likely to have children under 18 in the household, so discretionary spending can become stretched if they are also supporting aging parents.”
Investor tolerance for volatility
Comparing prior years’ comfort levels with market volatility shows that the market’s ups and downs are making investors queasier. When asked how much they agree with the statement, ‘I am comfortable with the highs and lows of the financial markets,’ just 31% agree, which is significantly lower than a year ago (51%), and about the same as the height of the pandemic (33%) in 2020.
Millennials stand out, with 49% saying they are comfortable with the volatility, compared to 22% of Gen Xers and 24% of Boomers.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
