Changing Demographics

A Lost Generation?

Wealth Accumulators Are an Overlooked Opportunity for Advisors

WARREN, NJ, December 11, 2015—Many Americans aged 34 to 50 lose track of their financial risks as they pursue careers, raise families and accumulate wealth, according to a new white paper from Chubb. In addition, many neglect to secure sufficient insurance coverage as their wealth increases.

The white paper, “A Lost Generation? Wealth Accumulators Are an Overlooked Opportunity for Advisors,” describes various personal property and liability exposures faced by the approximately 60 million Americans born between 1965 and 1981. It also recommends that wealth advisors work with specialist insurers, agents and brokers to help provide high-net-worth individuals in this age group with effective risk management strategies and insurance coverages.

“Clearly, there is a great opportunity for wealth advisors to work with this age group,” said Stacey Silipo, director of strategic partnerships at Chubb Personal Insurance. “However, to be successful, advisors will need to better understand these prospective clients and then be in a position to help them minimize all the major risks to achieving their financial goals.”

According to the white paper, many people in their mid-30s to late 40s share the same risk characteristics as younger adults, but often at a substantially greater exposure level. Noteworthy examples include:

  • They are more likely to acquire secondary or vacation homes in locations subject to fires, flood, storms or other adverse conditions.
  • They are better able to afford art, jewelry and other valuable possessions, exposing themselves to greater potential for theft and other property loss.
  • Children can expose them to vicarious liability—and potential financial ruin—through auto and home-related accidents and social media activities.

“It all happens so fast. One day you’ve just graduated law school and you’re in debt and renting a hole-in-the-wall studio apartment. The next day you’re buying a second home, art and a classic car, and then your kids are leaving the nest for college,” said Silipo. “It’s so easy to lose track of time and to lose track of your risks. An advisor can help put you back on track.”

Excerpts from A Lost Generation? Wealth Accumulators Are an Overlooked Opportunity for Advisors

  • Home Is Where the Risk Is
    Many articles and studies report that the 34– 50 cohort is not buying homes. U.S. Census data, as crunched by The Atlantic, show that the homeownership rate for those born between 1970 and 1979 fell to 59 percent
    in 2014, almost six percentage points lower than the population as a whole. The Joint Center for Housing Studies of Harvard University reports that between 2004 and mid-2103 the percentage of renters in this group rose by some 9 percent.

    Nonetheless, this is emphatically not the case for the Wealth Accumulators. The National Association of Realtors 2015 Home Buyer and Seller Generational Trends Report finds that those born between 1965 and 1979 make up 27 percent of both home buyers and home sellers—#2 and #1, respectively.

    Thus, a quarter of Wealth Accumulators are either scaling up or purchasing second homes. A 2013 article on the website HousingWire claimed that they are “simply approaching the natural point in life where a second home becomes a feasible option.” As noted below, The 2013 Fidelity Millionaire Outlook reports that 63 percent of its respondents own vacation homes. And those vacation homes may well be in a foreign country.

    A 2015 report by notes that “home renovation priorities span generations,” but that “while renovation considerations do not vary by generation, they are in fact tightly linked to household income.” It stands to reason that many Wealth Accumulators who are not scaling up or buying second homes are likely to be renovating, and this is reflected in the Houzz study, which finds that the largest group of respondents aged 35–44 and 45–54 “wanted to do it all along and finally had the financial means” (41 percent in each case). There is an endless variety of renovations—indoor or outdoor, structural, systems, additions, kitchens, basements, bathrooms, master bedrooms, “man caves.” To the extent the report breaks down its figures by cohort, Wealth Accumulators are willing to spend. For a large kitchen renovation, for example, the 35–44 group’s average expenditure is $37,000; for the 45–54 group it is $39,700.
    Renovation, though, presents a whole new sphere of potential liability. Workers will be on the premises, raising the risk of being injured or causing damage. Subcontractors may be involved, doubling the problems of dealing with the prime contractor. Shoddy workmanship can cause damage or even the destruction of the residence after the renovation is completed.

  • Relationships with Advisors
    Befitting their cohort’s name, the Wealth Accumulators are moving from strength to strength, acquiring more and better possessions, vacationing in more and more exotic destinations, taking their careers to the next level on the way to full high-net- worth status.

    to be successful, advisors will need to better understand these prospective clients and then be in a position to help them minimize all the major risks to achieving their financial goals

    But they have a problem with advisors—at least financial advisors. A 2013 Cogent Research study of investors with $100,000 or more in investable assets found that only 33 percent were highly confident in their primary advisor. The 2013 Fidelity Millionaire Outlook, which surveyed individuals with $1 million or more in investable assets, found that though 92 percent of Wealth Accumulators (and Young Professionals, whom the survey potentially hazardous ones such as Myanmar, Cuba, Vietnam, and the ultimate adventure travel destination, Antarctica, according to the 2015 Virtuoso Luxe Report. Their favored American and European destinations, such as Italy, France, and New York City, rank among the most expensive.

    With these expanded possibilities come expanded risks. Emergency medical treatment may not be covered by standard travel policies, and cancellation of a trip almost certainly will not be. In certain countries, the most frightening prospect of all, kidnapping, is a real possibility, if not for Wealth Accumulators themselves, then for their Young Professional children, who show an even greater interest in potentially risky travel.

    It is up to trusted advisors to stress Wealth Accumulators’ need for a comprehensive travel insurance plan covering all these eventualities. combines) use an advisor, 61 percent make their own investment decisions, looking to the advisor primarily for validation.

    The problem may not be so much one of trust as of use. Wealth Accumulators are using advisors but not in the most effective way. They need more than just a financial advisor. Asset and career protection are more important aspects of overall wealth management at this point. At the least, Wealth Accumulators need their financial advisor to work with a specialist insurer that can look at their whole life picture, present and anticipated future, and locate the weak points in which they are failing to mitigate asset and career risk.


“A Lost Generation? Wealth Accumulators Are an Overlooked Opportunity for Advisors” is available here.




About Chubb
Since 1882, members of the Chubb Group of Insurance Companies have provided property and casualty insurance products to customers around the globe. These products are offered through a worldwide network of independent agents and brokers. The Chubb Group of Insurance Companies is known for financial strength, underwriting and loss-control expertise, tailoring products for the needs of high-net-worth individuals and commercial customers in niche markets and select industry segments, and outstanding claim service.
The Chubb Group of Insurance Companies is the marketing term used to describe several separately incorporated insurance companies under the common ownership of The Chubb Corporation. The Chubb Corporation is listed on the New York Stock Exchange (NYSE: CB) and, together with its subsidiaries, employs approximately 10,000 people throughout North America, Europe, Latin America, Asia and Australia. For more information regarding The Chubb Corporation, including a listing of the insurers in the Chubb Group of Insurance Companies, visit