Labels can lead to retirement planning bias by advisors – St George News

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SPECIAL FEATURE – Social scientists and bestselling authors Neil Howe and William Strauss were among the first to track down and qualify American generations. In their famous book “Generations”, Strauss and Howe introduced the concepts of “Millennials” and “Gen-X” into modern vocabulary. Their new generation theory attempted to explain various social shifts in relation to when a person was born.

The popularity of “generations” has led to widespread acceptance of the idea that it is okay to overlook the complexities of human life, ignore diversity, and reduce people to one variable – their year of birth.

Unfortunately, this tendency to refer to retirees and early retirees as “Boomers”, “Millennials” and Gen-Xers has crept into financial services and retirement planning and is responsible for a lot of poor money advice.

Like an old newspaper horoscope, the generation theory puts everyone born in an arbitrarily set period of time (1961-1981 is Gen-X, according to Strauss and Howe.) Into a large category.

“You are a millennial. You’re lazy, legitimate, and easy to trigger. ”“ You’re a boomer. You hate risk and change. ”“ You’re a Gen-Xer; You’re an independent critical thinker. ”Financial advisors who use these kinds of simplifications as guides may not bother looking beyond the labels.

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For example, Harry, who was born in 1946, falls straight into the boomer category. His advisor believes that because Harry is a baby boomer, he is being challenged by technology and not open to virtual meetings, video training, online customer portals, or other modern tools.

This advisor also believes in the stereotype that all boomers are risk averse, so he’s aggressively reducing Harry’s retirement portfolio without bothering to learn more about his client. He doesn’t even ask Harry about his thoughts on risk and investing or whether he wants to do more business online because he assumes that all boomers are the same.

Generational theory in financial services is dangerous because its assumptions influence advisors to choose ways that may or may not be in the best interests of their clients. Generational theory can also prevent your advisor from developing a deeper relationship with you and discovering your unique connection with money, your retirement goals, and your true tolerance for risk.

Your advisor may create a broader budget for you or not offer you certain products because they think you hate taking risks. It could be because they put you in a generation box, ignoring the diverse environments and upbrings that have shaped your relationship with money. You may feel that the counselor is not listening to you or not taking you seriously.

For example, suppose you suspect your retirement and income planner is shopping into generational stereotypes. In this case, it is best to ask the advisor to explain his process and how it has evolved. An open dialogue with your advisor will help ensure that they address your concerns and offer solutions that match your attitudes and desires.

The bottom line

Many contemporary sociologists believe that generational thinking is an invalid pseudoscience. Unfortunately, however, generation theory continues to influence financial services marketing. When looking for a counselor, try to find someone who will avoid generational stereotypes and connect with different people across multiple demographics. Your financial future is too critical to trust someone who would want to pigeonhole you.

Copyright © Lyle Boss, all rights reserved.

Lyle Boss is a member of Syndicated Columnists, a national organization that advocates a completely transparent approach to money management. As an asset protection instructor, he has helped thousands of seniors find their financial retirement options. Its clients include government employees, teachers, doctors, farmers, and business professionals, to name a few. Boss has been actively teaching advanced estate planning and asset preservation for more than 20 years in locations like the University of Utah and in over 200 Senior Retirement Consumer Education Workshops throughout Utah, Idaho, and Wyoming. Boss and his wife Deanna live in South Ogden and St. George, Utah.

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