HOW ATTITUDES TOWARD ECONOMIC RECOVERY INFLUENCE BUSINESS TRANSITIONING

A new MetLife survey says the severe economic downturn has revised the retirement mindset for all generations. Better late than never (?) all generations regret their financial behavior pre-crisis. Amassing too much credit card or other debt was most prevalent among Gen Xers (54%); and Boomers more than others (22% to 17% for all Americans) regret insufficient diversification of assets.

Gen Yers expect the economic recovery to come sooner than other generations do. As a group, they expect the economic recovery for the country (29%) as well as for themselves (49%)  to come in less than 2 years, according to the survey. Older Boomers (over age 55) are the most pessimistic about their own financial recovery, probably because they have less time to make up for recent losses. 38% of younger Boomers believe their personal financial recovery will take at least 10 years.

These attitudes haven't translated into much action so far. 44% haven't done anything yet to change their retirement/investment behavior, probably owing to both inertia and confusion. 54% of Gen Yers haven't made any changes, and 45% said the financial crisis had little or no impact on them. Is this undue optimism, since job loss is high, along with salary cut-backs, and not showing signs of turning around soon? Or is it not knowing better, or the influence of an upbringing which told them they would be successful whatever the situation?

In the workplace, will the behavior and attitudes found in the survey mean an increasing divergence in opinion on how a business should make its investments in technology, training, risk management, etc.? Protective strategies vs. future investment at higher risk aiming at higher gains?

Will these differences make it more difficult to achieve smooth transitions of practices and clients from one generation to another? As individuals, according to the study, are increasingly realizing they need and are turning to financial advisers, will firms turn to advisers to help them achieve more harmonious, win-win transitioning that will benefit the firm overall, those who are leaving, and those who continue on?

Your thoughts?

Phyllis Weiss Haserot      www.pdcounsel.com