The Emerging Retirement Wave

Planning And The New Demographics

How the lessons we learned during Covid-19 can inform and define our path forward

by Anita Grossman

Ms. Grossmans is the President and Founder of Grossman Financial Planning Group (GFPG). Grossman helps families build and protect their wealth, by providing them with creative financial solutions that include plans to protect their wealth for the next generation.  For more than two decades, she has been with Lincoln Financial Group, a long-standing financial institution with deep resources and an esteemed team of national specialists.

Throughout the past year, the COVID-19 pandemic has transformed nearly every aspect of our world. Seemingly overnight, we switched to a digital culture and the quirky (pets and children popping in during a Zoom call with clients) became common. Meanwhile, our friends, family and colleagues have had their lives changed in critical ways that promise to have much longer-lasting effects. Living through a global pandemic has driven dramatic shifts in how we approach our jobs, childcare, and our finances.

As a Private Wealth Strategist for more than two decades, I’ve seen the ups and downs of the market and how it has affected clients’ needs. The COVID-19 pandemic has delivered a new set of challenges that we must address as financial professionals to retain and attract new business.

Improving Our Programs And Capabilities

One of the biggest remaining questions out there about COVID is how many of the changes we’ve seen throughout the last year will be permanent and how many will be temporary? If we had a magic wand and COVID ended today, would we revert to our old patterns and behaviors?

I believe that the financial services industry is likely to adopt a lot of the changes we’ve encountered permanently. We’ve all seen the news coverage highlighting how COVID has driven nearly all industries to improve their digital programs and capabilities. And financial professionals are no different. We know that COVID alone hasn’t suddenly caused the shift to digital, but it has certainly accelerated it as more and more people have digital ecosystems as part of their lives.

It’s undeniable that our world has shifted to digital, increasingly so over the past year, and that it is driving changes in consumer preferences and how they want to engage with all aspects of their daily lives, especially their finances. Innovative technologies are making it easier for consumers to stay informed about their investments and financial well-being. Not only does this type of technology and software help provide a holistic view of a client’s financial plans, but it also allows financial professionals to develop deeper relationships with their clients.

By adopting these new platforms, professionals can converge their financial planning experience with technology to provide comprehensive financial planning support and digital tools for a better and more engaging experience for their clients.

Young Americans Hit The Hardest

Another major shift in client behavior as a result of the pandemic is the way in which they are saving and planning for their futures. The financial consequences of the pandemic have impacted every generation — but younger Americans are being hit the hardest, according to Lincoln Financial Group’s September COVID-19 Consumer Sentiment Tracker. Millennials are especially worried about making ends meet and not having enough “know-how” to manage their finances.

Whereas Boomers and Gen X are more concerned about protecting their investments and retirement savings respectively, the study found younger demographics are facing increasing financial and job security pressures in the wake of COVID-19.

The current economic environment is prompting more younger Americans to think about planning for their financial future. The research found roughly half of Gen Z and Millennials say they are thinking more often about financial planning compared to only 29% of Boomers. The Millennial mindset is most affected by the events of recent months — with more agreeing that they are thinking about and planning for the future differently as a direct result of the pandemic. Many financial professionals are changing their business models to incorporate the needs of clients across multiple generations. While there remains a need for many traditional forms of advising, the ability to span generations will ultimately lead to new opportunities for growth and business development.

A Brave New Digital World

This is where financial professionals can embrace the new technologies discussed earlier to meet younger Americans where they are – in a digital world. By utilizing new and innovative technologies to make financial planning more interactive, we are catering to the needs of our younger clients by allowing them to feel engaged and in control of their financial futures. Technology allows for more collaboration with clients and creates a clearer path for goals-based planning that is essential to younger investors.

Whereas Boomers and Gen X are more concerned about protecting their investments and retirement savings respectively, the study found younger demographics are facing increasing financial and job security pressures in the wake of COVID-19...

One of the biggest consequences of COVID-19 that we are seeing as financial professionals is the increased economic impact of the pandemic on women and minority communities.

A New Focus On Women

A recent LFG study found the COVID-19 crisis has hit women harder financially with more frequent job impacts than men, driving their top concerns of covering day-to-day expenses and a lack of emergency savings. As men are taking on more strategic long-term financial actions like meeting with a financial advisor, women are enduring financial hardships in order to make necessary and immediate financial decisions. The research shows women are delaying major purchases like cars and homes and drawing from their emergency funds at higher rates than men.

As a result of the COVID-19 pandemic, financial professionals need to provide women a boost in feeling more empowered about their financial future. Women are more than twice as likely to be unfamiliar with financial planning and investments than men, who are increasingly reading and learning about financial markets and investing.

Women tend to approach personal finance differently from men which has only been compounded by the pandemic. Female financial professionals have the power to motivate and support each other, then share that contagious empowerment with the women who seek their advice and guidance. It is critical that women feel confident about their financial futures, so developing and providing resources for their female clients is any easy way for professionals to acknowledge and respect the changing needs of women clients.

Financial planners are helping women take a holistic view of their finances, from the accumulation period to and through the distribution phase, while considering asset protection strategies. Financial advisors also can help women think through “what-if scenarios” because life can bring unexpected situations. When planning and implementation strategies are put in place to protect against some of life’s unexpected, unpleasant circumstances, clients whether male or female will have greater peace of mind and confidence in their financial future.

Race & Ethnicity

A similar theme is seen in minorities communities across the country as a result of COVID-19. Another recent study from Lincoln Financial Group finds that African American consumers are most likely to have experienced job loss as a result of the pandemic – a situation that inevitably contributes to their top financial concerns of not having enough emergency savings and not being able to cover day-to-day expenses. According to the research, a large majority of African Americans are planning to make permanent changes to the way they spend and save due to the COVID-19 crisis. Furthermore, 75% are planning for their financial future differently as a result of the pandemic, prompting a growing appetite for financial planning resources. This is a solid foundation to build upon in order to create positive financial outcomes.

As financial professionals, our goal is to help African Americans and all consumers understand the importance of saving for retirement as well as educating communities on financial wellness and preparedness. By providing resources like online budgeting tools and calculators, advisors are helping their clients make small changes that really add up in the long run. A simple financial plan can provide a long-term road map for all of our clients to achieve success.

Financial professionals are in the business of imagining the future — understanding the significant immediate and future challenges to their clients posed by COVID-19 and how it will impact their long-term financial futures. Responding to the changing needs of clients is critically important in protecting their finances. At a time of crisis, it is important that we share insights and experience as much as possible, helping each other to contain and mitigate the impact of COVID-19 on our clients and the broader economy.




Visit Lincoln Financial Group’s September COVID-19 Consumer Sentiment Tracker here.