“High tech and high touch” characterizes the approach of Generations X and Y’ to financial planning and advice. Greenwald & Associates Research Director Lisa Schneider delivered that message to attendees at the NTSA 403(b) Summit on June 23. While younger workers are tech-savvy, they also want a human touch and dimension. Schneider discussed “A Tale of Two Generations: Investment Behaviors of Gen X/Y,” a study her firm and Security Benefit partnered to conduct in April 2014.
Employees who belong to Gen X and Gen Y do not prefer online services for making financial decisions, the study reveals. They want online calculators and tools, but that’s where their reliance on technology stops. Schneider said they prefer that their financial advice — which they do want — come through human contact. “They want to talk to a live person,” she noted.
And it’s even more pronounced for educators in that demographic. “Educators prefer a ‘do-it-for-me’ approach,” said Schneider. They want help from an advisor. Nearly half of Gen X/Y educators studied believe an advisor is a major source of information for retirement products, and 58 percent would participate or contribute more to their employer-provided benefits if there were more in-person education and advice.
There are shades of difference between these generations, the researchers found. Gen Y, younger and more likely to have outstanding student loan balances, is more focused on paying off debt than Gen X. Slightly older Gen Xers are concentrating more on meeting competing financial priorities, such as mortgages and child care-related expenses, than Gen Yers are.
Educators in Gen X/Y are slightly more focused on preparing for retirement than their counterparts in general, according to the study. They are far more likely to be participants in a defined benefit plan — perhaps owing to their being public sector employees — but also are more likely to have a 401(k), 403(b) or 457 account. A majority of educators said they are on track regarding retirement saving, while 48 percent of Gen X/Y in general said so.
Gen X and Gen Y employees — educators included — prefer to save for retirement through their employers. And they all like learning about financial planning; they want education and advice from a real live person, and many educators prefer getting that at work.
“I think there’s lots of opportunity out there,” said Schneider, noting that despite these findings, advisors are not paying much attention to this demographic group. And seizing on the results showing educators’ affinity for saving and desire for education, personal touch and workplace accounts, Security Benefit Senior Marketing Manager Chad Liby noted, “This makes the case” for advisors working with educators.
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