While the industry is ultra focused on Millennials inheriting Baby Boomer money and taking over the market in big way, many advisors are forgetting about the demographic that is at the peak of their earning years right now – Generation X.
This generation makes up 60 million people. This is a huge demographic for the financial industry which is why financial planners need to start paying more attention to this “forgotten generation” as Investment News calls it. Gen Xers are skeptical to invest due to the 2008 financial crisis and even more suspicious of hiring a Financial Advisor, fearing they will be taken advantage of. According to a 2014 Allianz Life Survey, 75% of Gen Xers believe financial advisors are just out to sell them something and make money for themselves. It's possible to turn this stat around if you understand their financial pain points and speak their language.
What a Gen Xer Looks Like
It’s important to get a grasp about who Gen Xers are so that we can best service their needs. Gen Xers are very different from their Baby Boomer predecessors. Being cognitive of a client profile based on their generation can be useful in finding what the most efficient ways to communicate with them are so that you can effectively build a relationship with them.
Generation X Characteristics
- They are between 35 and 50 years old, born between 1965 and 1980
- They have houses and children
- They are in the peak earning years of their life. Many earn between $200,000 and $400,000/ year and are still going broke
- There are more spenders than savers
- They take lavish vacations
- Many have bought houses that are too expensive
- They will be paying off their college debt into retirement
- Many have failed to save enough for their children’s college education
- Some have co-signed loans for adult children
- They have signed up for too many credit cards
- They are on monthly payment plans (ex. Cell phone, day care, private school tuition bills)
- They are stretched for time; they’re too busy to read their bills
- Most bills are received electronically and some are paid automatically
Understand their Pain Points
While Gen Xers have embraced technology, they may not be benefiting from the convenience of doing everything electronically. Making automatic monthly payments can easily prevent them from paying attention to bills which makes them completely disconnected with their personal finances. Helping your Gen X clients to realize this issue will position you as someone who understands technology and can teach them to better utilize it. Providing a list of best practices for monitoring electronic payments will make you look like a rock star. To really impress them, find ways to update them on your services electronically. A streamlined online process will ensure their comfort and satisfaction, sustaining you business in the process.
Speak Their language
The key to consulting with Gen Xers in the most efficient way, is to speak their language. Be transparent; Gen Xers are suspicious of you and your industry. Be open with them and give them no reason to worry about where their money is going. Provide a long term plan. Budgeting and forecasting will build trust an appreciation from your client. Consider consulting them in a way they are used to. Billing them monthly and updating them electronically will make them feel comfortable and informed.
At Vanderbilt we provide our clients with online access to their accounts through Albridge Wealth Reporting, MyStreetscape, and Docusign so that an open line of communication is maintained. This help to make our clients, especially our Gen X clients, comfortable as they have the ability to keep tabs on their money when and how they like to.
Adopting electronic trends like this will not only help your practice for the Gen X generation, but for all future clients as they have been brought up with a high level of technology.
About Vanderbilt Financial Group: Founded in 1965 and located in Woodbury, NY, Vanderbilt Financial Group is an Independent Broker Dealer known as the Sustainable Broker Dealer committed to investing with purpose. The firm offers Impact Investments in socially and/or environmentally responsible, ethical, and impactful opportunities. In 2014 the firm was recognized with the MAP Vital Factors Solutions® Presidential Award for achieving excellence through implementing the MAP Management System™ and in 2015 became the first LEED Platinum office building on Long Island. Vanderbilt’s refreshing, unique, and innovative culture is a driving force to constantly strive to positively impact their community. To learn more, check out http://joinvanderbilt.com/.