A $450 Billion Market: Gen X Women

When financial advisors indicate that they specialize in working with women, they usually mean one of two broad niches: divorced women, or widows. However, fewer advisors focus on "Generation X" women, the 4 million or so women, the daughters of the Baby Boomers, born between 1965 and 1978. Although there is a lot of guesswork in studies like this, Allstate Corp. estimates that 16% of Gen X women will inherit more than $100,000...which represents a total market of more than $450 billion.

A recent article in National Underwriter entitled, "She's Young and Will Be Rich...Reach Her Now". Here are some of the article's observations:

• Affluent families may be more likely to educate their daughters about money, but many young women are as confused about money as previous generations.
• Given that the mothers and grandmothers of the Gen X women still have large, unmet planning needs, the younger generation has been largely ignored by financial services marketers.
• Spectrem Research has found that Gen X women are more conservative about investments and depend more heavily on advisors than comparable men.
• Younger women face concerns about what might happen if they marry men who are dishonest or bad with money.
• Savvy wealth advisors aren't waiting...they are attempting to build relationships with daughters and granddaughters of their clients now.
• A significant proportion of young women are interested in using part of their wealth for societal good...therefore socially conscious investment strategies have resonance.
• A certain amount of Gen X women have/will marry young men from overseas...creating complicated tax-planning problems, and possible immigration issues. Advisors who have clients with these needs should have relationships with experts on immigration and international tax law.
• To break into the young affluent female market, advisors will need to pursue far more targeted strategies than employed currently.

Sadly, Generation X also expects to receive another, more unfortunate legacy...$4 trillion in national debt. For those of this generation who have the good fortune of inheriting substantial family wealth...the sooner that planning begins, the better.

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