Understanding how different generations are shaped by their experience and events serve as milestones, marking out the history of social change. As multi-generational Financial Planners, we recognise the differences between generations; their values, and especially the way in which they plan. At present, for the first time in history, there are five generations in the workplace:

Preferred Communication by Generation:

Some suggest that the older generations have had the upper hand. Final Salary schemes have provided attractive pension benefits. These are rare in the workplace today meaning many now only have access to less generous ‘money purchase’ (defined contribution) arrangements. Pensions, generally, form a large part of an individual’s assets and provide many planning opportunities, especially since pension freedoms were introduced in April 2015.

Investment is simply, “Taking some of what you have today and putting it aside for tomorrow”. And, unless you are the recipient of a gift or inheritance during your lifetime, it’s your responsibility to invest wisely from your income, building sufficient capital to provide for retirement. Moreover, if you are fortunate enough, employment can eventually become a choice, rather than a necessity.

Investing is easy, but not simple. There are thousands of places to put your money. However, it needs to be in the right place, with sufficient risk to achieve the returns you need over the long term, but not too much. Adding to the complexity is the temptation to make impulsive investment decisions based on emotional reactions to circumstances, media headlines, or market commentators.

The recent pandemic has created significant volatility in global stock markets, so how did the generational investors respond?

  • 82% of Millennials (Gen Y) made changes to their portfolios.
  • 69% of Gen X made changes.
  • 47% of Baby Boomers made changes.
  • 32% of Maturists made changes.

When it comes to assessing their investing knowledge and ability:

  • 42% of Millennials considered themselves to be experts in the field.
  • On the same question, only 23% of Baby Boomers could say the same.

Managing Investments:

  • 66% of Millennials saw the ability to manage all aspects of personal finance, including investments, in the same app as being important.
  • Only 35% of Baby Boomers agreed to the above statement.
  • ESG (Environmental, Social, and Governance) investing is the preferred option for Millennials, compared to their Baby Boomer counterparts.

As you can see, it’s a mixed bag. Some are confident, some feel ill-informed and have little confidence in financial decision making. That’s where we come in.

Creative Problem-solving: Over the years we have developed a specialist approach to solving Financial Planning problems. Working closely with individual clients and their families has allowed us to develop multigenerational planning strategies.

Understanding generational differences: Each generation is unique which keeps us on our toes. Different communication and learning styles and the continuous adoption of new technologies can be challenging for clients as well as ourselves. We know this because we have representatives from Baby Boomers, Gen X, and Gen Y in our office and each handles change differently. So, we understand the occasional tensions that change and new technology can bring.

Rising to the challenges: Generational diversity at work presents learning opportunities and challenges for all employees. We encourage collaborative working, recognising we can teach each other new skills. What’s especially helpful is having more tech savvy younger employees help a Boomer (that would be me) transform processes by teaching new technology skills.

A target rich mentoring opportunity: We recognise the value of mentors in the work environment, but we also see it developing momentum within client families as skills are passed on. This helps employees gain new skills but also demonstrates the value of collaborative team working as coaching and mentoring become part of our “on the job” training. We have several clients who regard us as financial coaches and mentors. Some go further and would describe us as life coaches, which is a huge compliment.

We are in the early stages of working with a new financial technology partner which will take our client communication, speed of response, and data security to a totally new level. More details will follow in our Winter Client Update.

Perhaps one of the best quotes about the differences in generations comes from Steve Jobs, “Older people sit down and ask, “What is it ?” kids ask, “What can I do with it ?”. In many ways we are those kids who look at Financial Planning as a verb, not a noun.

2022 will be a year of further collaboration and creative problem solving, then again, every year is for Stewardship Wealth. To borrow from Maya Angelou, “We’ve learned we still have a lot to learn”.