In Profile: Greg Oberland

Generation Skipping

by Carolyn Ellis, Advisor Magazine Features Editor

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In 2014 Northwestern Mutual studied a wide range of Americans’ attitudes and behaviors related to money and financial health. Findings from the 2014 Planning and Progress Study revealed important generational differences, including the tendency of the youngest adults to return to the careful savings habits of the Greatest Generation, their grandparents. Greg Oberland is president of Northwestern Mutual, in Milwaukee. We spoke with him about these surprising results and the opportunities they present for advisors and their clients

L&HA: What were you hoping to learn when you commissioned the 2014 Planning and Progress Study?
GO: What we’re doing in the marketplace needs to be relevant to consumers. We wanted better insights into different market segments — education, age, gender, race, ethnicity, region and household income. We were interested in how people feel right now about their current financial situation, how people plan, and whether they feel their planning needs improvement.

L&HA: How did the Planning and Progress Study approach these issues?
GO: The study looked at different population segments and considered questions like, are they engaged in planning? Are they disciplined about planning or not? Do they feel they are moving in the right direction? We wanted a picture of individuals’ risk tolerance around financial matters. Are people feeling optimistic or pessimistic? Is their perspective short- or long-term? Are people confident that they can handle financial planning on their own, or do they need a professional to guide them?

L&HA: Certainly young and old today feel financial pressure from increasing longevity.
GO: Actuarial studies show people are living longer. We want to know if people, as they head into retirement, fully understand how long they might live and if they have a financial plan for that period. Our findings relating to Millennials, young adults ages 18-29, were surprising: it showed they are the most disciplined generation since their grandparents about saving and investing. Many are proactive, patient, cautious, and humble.

L&HA: Where do you think the Millennials get this sense of financial responsibility?
GO: They are the best-educated generational group in American history. A much greater percentage have college degrees, and they are very well connected with others. They witnessed the huge drop in equity markets in 2008 and 2009, so they have a sense for how fragile and volatile things can be. They may have seen their own families struggle with nest eggs washed away or a parent being laid off.

L&HA: Could having access to 401(k)s as they enter the workforce create a greater sense of personal responsibility?
GO: When their parents went to work the approach was more paternal with defined benefit plans and health insurance for retirees. We now see a significant number of Baby Boomers approaching retirement woefully unprepared. Millennials understand they are on their own; they don’t stay long with one employer. Many come out of college with significant debt. That’s a motivator their parents’ generation didn’t have. This generation is more about slow and steady. In the study a third of them acknowledged that they prefer to be more cautious with investments, but they have a lot of catching up to do.

They witnessed the huge drop in equity markets in 2008 and 2009, so they have a sense for how fragile and volatile things can be. They may have seen their own families struggle with nest eggs washed away or a parent being laid off

L&HA: Do study findings indicate what level of savings these Millennial respondents have?
GO: Their savings may be modest now, but for younger advisors coming into the marketplace, some of their Millennial peers would be excellent individuals to start working with. Set them on a path of financial discipline, with a budget and consistent savings pattern. Encourage them to take advantage of a 401(k), especially if there’s a company match. These basics don’t take a lot of time, but over time you will build a lucrative client base. There’s going to be significant wealth transfer in this country in the years ahead, and a good chunk of that money will flow to these Millennials.

L&HA: How would you describe the ideal agent for Millennials?
GO: It’s important that experienced agents reach out to Millennials, and it’s important how they work with them. A meeting followed up with a snail-mail letter is not going to appeal. It’s got to be quick and transparent, no gobbledygook. This generation won’t respond to a push sale. What you recommend has got to fit in with their goals and objectives.

L&HA: This advice sounds like the guidelines for selling to women.
GO: With Millennials and women, the sales approach and recommendations need to be customized. This generation feels they are special, not like everyone else. Think about their clothing, tattoos, and their playlists. They don’t buy LPs or CDs like we did. Even their music says who they are as an individual.

L&HA: Are they buying insurance, especially life insurance?
GO: They have a sensitivity around risk management, so if an advisor positions insurance products the right way, they will be receptive to buying. Start with their goals and objectives. How much money do you want to have at retirement? What type of lifestyle would you like? Do you want a big or a small house, or maybe you’re not planning to buy a house. As I said, a push sale is not going to work. Ask them if they want to get support to provide for their family, to maintain a certain lifestyle. Then you back into, okay, if that’s what your objective is, you need disability insurance to protect against loss of income. You also need life insurance so if you pass away prematurely your family will have the financial resources to continue.

L&HA: Millennials want online resources, so you’ve created a website for financial awareness.
GO: Two-thirds of Millennials agree there is room for improvement in how they manage their money. We think Millennials will be more receptive to working with a professional if they better appreciate the value. We created The Mint ( a user-friendly resource, not heavily branded, and open to all. It looks at planning considerations with tools, calculators, and PDFs so Millennials can do their own customized plan. There’s weekly blogging on relevant topics with links to other materials and outside experts. It’s an incredible value-add for our field force, too.

If you are an advisor and want your practice to continue to grow, you may have to get comfortable with learning how to approach and successfully work with Millennial clients because they may end up controlling a significant amount of the assets out there.