The wealth management industry must pay heed to the very different needs of different generations of the population in the UK, a study by Barclays says.

The wealth management industry needs to adapt its approach, advice and products to cater for the increasing diversity between generations in the UK, according to a new report by Barclays which explores the financial aspirations, concerns and priorities of the three largest generational cohorts in today's workplace - Baby Boomers, Generation X and Generation Y.

The report, called Talking About My Generation: Exploring the Benefits Engagement Challenge, said the inequality in generational wealth distribution that has occurred as result of wider economic shifts had significant implications for wealth managers.

“From our research we discovered vastly disparate lifestyle priorities and financial concerns amongst the different generational groups, as well as different requirements when it comes to financial guidance and products," said Katharine Photiou, director of Barclays Corporate and Employer Solutions.

"Noticeably, our research highlighted the fact that younger generations in particular need access to financial education and guidance  – at the moment they have either opted out of making financial decisions or are financially innocent about what their priorities should be," added Photiou.

Barclays interviewed 1,200 employees and a series of six focus groups at a range of leading organisations, including Fujitsu, Langland and Nuffield Health.

Financial characteristics across the generations

The report found that those born before 1945 are most likely to be conservative financially. They will have also  invested in property and are concerned about pensions and savings.

Baby Boomers (1945-1960), are affluent, willing to spend and loyal to established brands and products. They value relationships and personal services and are also happy to do their own research online.

In contrast, Generation X (1961-1980) is generally less affluent than the Baby Boomers and values convenience, reliability and flexibility. Despite this, they can be cynical and are willing to shop around.

Generation Y (1981-1995) is affluent with less financial ties than older generations. They are well-connected and global citizens but also value personalised, face-to-face advice.

Those born after 1995 are likely to enter the job market with education-related debts and will not expect to own their own home for a number of years, meaning they will value flexible financial products and advice on long-term saving.

Lifestyle aspirations and priorities

In other findings, the report highlights the differences in lifestyle aspirations and priorities between the different generations.

While over half (53 per cent) of Baby Boomers are prioritising saving for retirement, the majority (41 per cent) of Generation X is focused on paying off their mortgage.

Meanwhile, Generation Y has to deal with the double whammy of paying off unsecured debt (30 per cent) and buying their first home (29 per cent).

The report also revealed that Baby Boomers’ family responsibilities are the most complex and challenging of all three generations, leaving them sandwiched between having to care for elderly relatives and supporting Generation Y as it attempts to gain a foothold on the housing ladder.

Generation X's priority is about managing today, whereas for Generation Y, the priority is becoming established at work and in the housing market.

The role of employee benefits in generational wealth management

Nearly two thirds (65 per cent) of Generation Y employees said that they would value financial education or guidance in the workplace, but 83 per cent of all employees surveyed confirmed that this was not available to them through their employer

Meanwhile, a quarter of Generation Y employees would value access to a personal banker through work, although this was available to only 4 per cent of all respondents.

"These findings show that the current, traditional employees benefits package no longer suits the needs of younger generations. Revolutionising the benefits available to employees in the workplace could have one of the biggest impacts on increasing the financial awareness, as well as the wealth, of the different generations," the report said.