Understanding your client base is critical to serving their needs. Baby Boomers, a generation with considerable investment power, can get a bad rap sometimes because they’re misunderstood. It doesn’t help that outdated myths obscure the truth, leading to missed opportunities to connect with this cohort of investors. Below, we debunk five common myths about Baby Boomer investors, separating fact from fiction.
Myth 1: Baby Boomers Are Tech-Phobic
While they didn’t come of age with digital technology, the lion’s share of Baby Boomers today are at least open to learning about how to use technology in their personal lives. Per Statista, 76% of Boomers reported owning a smartphone in 2023. Many are comfortable using digital platforms to access statements and interact with advisors because of the convenience factor.
The lesson here? Don’t shy away from using digital tools to cater to this audience. They can still elect to use analog solutions, but you should at least give them the option for how they wish to engage. Their response might surprise you.
Myth 2: They’re Risk-Averse Investors
The perception that people over 60 have a “play it safe” mentality isn’t necessarily the case across the board. Many are comfortable with a portfolio of high-growth investments, especially as they have their sights set on maximizing retirement savings or planning an imminent wealth transfer to children or grandchildren. Generally speaking, Boomers are inclined to weigh risk against strategic returns.
With this in mind, advisors would be best served to present diversified investment options that consist of moderate-risk, high-reward opportunities. Like any generation, Baby Boomer clients want to feel like the advice they receive reflects their unique circumstances.
Myth 3: Baby Boomers Stick With Firms No Matter What
Loyalty may enter in the equation for some older investors, but that doesn’t mean they’ll put up with anything. Baby Boomers are increasingly inclined to fire advisors if they don’t feel heard or aren’t getting enough perceived value from the relationship. Demonstrate your worth by offering expert financial advice backed by proactive, personalized service. Be mindful about taking action to sustain their trust and give them a reason to recommend you.
Myth 4: All Boomers Are Preparing for Retirement
Though it’s imminent for many, not all investors in this generation are singularly focused on relishing the fruits of life post-work. Many are active business owners with no intention of slowing down soon and prefer to keep their minds and bodies engaged. Some Boomers are thinking about carving out a legacy through philanthropic efforts and want guidance on how to do so.
The idea here is to avoid subscribing to a one-size-fits-all approach. Get to know each investor’s goals and aspirations and ask clarifying questions when in doubt. You might uncover some helpful nuggets about their personal lives that help you connect with them on a deeper level.
Myth 5: Boomers Are Living the Easy Life
Some Boomers are sitting pretty, due to family wealth or other circumstances. But that’s not necessarily the case across the board. According to the Federal Reserve Bank of New York, boomers collectively are shouldering the burden of nearly $3 trillion in total debt. These liabilities include credit cards, car loans, mortgages, and other types of loans.
The bottom line: Baby Boomers are not a monolith nor should you treat them as such. We all have biases that impact our ability to do our best at work. The best thing we can do is acknowledge them and try to check them at the door. Making assumptions about a generation of investors’ needs, preferences and goals serves no one. There’s no substitute for getting to know each client on an individual level, no matter their demographic background. When clients feel valued, they’re more likely to stay and refer others.
Advisors who find in-roads with Baby Boomer investors have one thing in common — efficiency in workflow. To that end, Docupace helps advisors tame back-office operation chaos, maintain compliance, and focus on building stronger client relationships. Book a discovery call and learn more about how Docupace’s platform can help you enhance client relationships, no matter their background.
