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Gen Z (born since 1996), the first generation to grow up as true digital natives, is now entering the workforce. This generation makes up 25.9% of the United States population, the largest percentage, and contributes $44 billion to the American economy. By 2020, they will account for one-third of the U.S. population.

At the same time, the average annual growth rate for employees age 55 and over is projected to be 1.8%, which is more than three times the growth rate of the entire labor force. With so many workers financially unprepared for retirement, we can expect a significant increase in people continuing to work into their 60s, 70s, and even 80s, both full-time and part-time.

For the first time in history, we have five generations coexisting in the workplace, a phenomena that is likely to only accelerate as the population ages. What does this trend mean for retirement plan advisors?

First, it means realizing that different generations are likely to have different financial goals depending on life stage as well as individual circumstances. Business models and advisor technology need to change to incorporate better participant management. For example, millennials may be more concerned with paying down debt or saving for a downpayment on a home than retirement, while boomers may be concerned about saving for retirement but are failing to take action because they are helping their adult children financially. Gen Xers may still be paying down debt while supporting aging parents. One-size-fits-all education or advice won’t work; personalization is key, and financial wellness technology can help make personalized advice and education scalable, to give every plan participant a great customer experience.

Taking generational differences into account also means having flexibility around marketing and communication. What worked to market your services or your firm previously may not going forward. Be prepared to use a variety of styles and methods to get your message across to match generational preferences. For example, Millennials care about having a personalized experience, understanding their financial health, and taking the initiative to proactively set themselves up for success. Gen Z on the other hand tends to be more independent and private, preferring social platforms that offer greater privacy, like Snap and Instagram. They also consume vast amounts of content on YouTube, with 95% reporting that they watch YouTube videos and 50% saying they cannot live without it.

While there are certainly differences in how each generation approaches work, it’s also important to remember that many employees share attitudes and values no matter what their age is, and have more in common than one might think. For example, the workplace has democratized access to technology such that everyone uses laptops and collaborative software now. A frequently-cited study from the University of Minnesota found that regardless of generation, almost all workers want a workplace culture that is flexible, fair, ethical, and straightforward, and one where they feel valued and appreciated.

To that end, offering financial wellness as a benefit is becoming more widespread among plan sponsors, and they most often choose their 401k advisor to provide it. Employers are using financial wellness both as a way to improve overall productivity through reducing financial stress that can distract workers, and as a benefit that can attract top talent while increasing employee loyalty and retention. And while Gen Xers are the biggest users of social media, even more so than Millennials or Gen Z, every generation appreciates having access to a human advisor as well as on-demand financial technology.


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