What is ‘the sandwich generation’? They are the people, typically aged from 45 to 60, who are effectively ‘sandwiched’ between caring for their elderly parents and continuing to support grown-up children.
At Aviva, we’ve been looking at how you can help your sandwich generation clients by using behavioural science. They represent a significant client segment, potentially up to two thirds of your client base, and come with multiple needs. As well as planning for themselves, they are also concerned with taking care of the often complex needs of their family.
Why is it important for advisers to understand the sandwich generation?
Andy: Up to two-thirds of your client base could be this generation, so it’s only good sense. Also, these are clients with many and pressing needs – planning for their own retirement, taking care of dependents (both older and younger) for whom they require protection, and some may also have private medical insurance.
Paul: Behavioural science allows us to look for general mechanisms of understanding and behaviour that will apply to everyone. However, it’s especially beneficial for the sandwich generation because they are challenged – they’re being pulled in different directions. They also face an information overload, so one way to make life easier for them is to help clarify their choices. Aviva’s research shows that advisers are likely to share characteristics with this generation, so they could be the perfect messenger, combining expertise with personal experience of the issues involved. This means advisers can potentially bring up ‘case studies’ from their own lives, or proven examples of challenges they’ve overcome, and so deliver even better value in their advice.
Why do you think these clients experience inertia?
Paul: We change only when we have reason to. So a client might think, “I’ve left it this long already, nothing bad has happened to me, why should I do something now?” As long as there are no negative consequences, people see no reason for action. This is where you can use behavioural science to help clients think about the impact of their actions.
Andy: And that’s down to the nature of financial products - the client won’t encounter those negative consequences until much later, for example at retirement, or if they need to make a claim. But here we come to another big issue for the sandwich generation: they have a lot of things on their minds at all times, and because they’re so busy caring for others they find it hard to prioritize their own needs.
Paul: We’ve also found that it never feels like ‘the right time’ to make a decision or take action. We’re all guilty of telling ourselves ‘I can make that decision tomorrow’. We have the idea that our future selves (that’s what I mean by tomorrow) are always more generous and have more time than we do today – we’re nicer people tomorrow. But as we know, tomorrow never comes.
Andy: This is a challenge that many advisers face: their clients struggle to make decisions and allow themselves to believe that they will take action in the future. As Paul said, this time never comes, leaving clients unprotected and unprepared. The sandwich generation have so many things to consider that anything apparently non-urgent just gets pushed back and back. But with constant demands on their time, it’s hard to know when those longer-term decisions will make it to the top of their to-do list.
How can behavioural science help advisers?
Andy: In our latest book, New Thinking, we explore ways to help clients achieve the outcomes that are right for them. In our analysis of the needs of the sandwich generation, we focus on four key areas:
The book is accredited by the CII, so advisers can gain structured CPD hours from reading it and answering the questions correctly.
For more information on behavioural science and the sandwich generation, or to download your copy of New Thinking, visit AvivaSandwichGeneration.co.uk.