This is the second in a two-part blog series on how advisors can take advantage of the opportunities among younger clients—the children and grandchildren of Baby Boomers.
We all want to work smarter, not harder. Yet thousands of advisors are draining resources and energy trying to gain Generation X business with strategies that were meant for this generation's parents.
In my last column, I wrote about some of the financial issues this generation faces that advisors should keep in mind as they tailor their services to a new and, in many cases, more difficult to reach, client base. However, there is opportunity to work smarter with this new wave of clients through the Boomers you are working with now. Advisors who are having the most success with wealth transfers are capitalizing on the direct channel they have to their Boomer clients' children and grandchildren, in order to build relationships and gain their trust. It may seem an impossible task since over 90% of heirs transfer their money from their parents' advisors once they receive it, but it's not. There are ways to reach this generation better, without much further effort and while working with your current clients.
Gen Xers are a unique bunch. They're "wary of hype and overselling" according to Karen Ritchie, late author of Marketing to Generation X and a leader in global marketing and media strategies. Because of this, advisors must penetrate through the noise and reach Gen Xers with a message that is tailored to their needs and that continues to grow and change as Gen X changes; advisors will need to appeal to their specific expectations and values. There are some general themes to keep in mind in order to tailor your business for working with this generation:
Working With Gen X, Theme 1: Start Early; Be Patient
Gen Xers tend to bounce around a lot. They've been accustomed to earning their keep and are resourceful—using technology to advance their careers rather than sticking around a company for many years to climb the ladder. This means they have generally been perceived as less loyal to corporations than past generations—mainly because they are opportunistic in seeking ways to better their situation. That means gaining loyalty from this generation is harder than it was with Boomers. Advisors will need to start working with this generation early on—they'll need to take time to build their trust and respect, and to keep it: waiting until a wealth transfer will be too late.
If you're dealing with Gen X children who will likely be heirs to your clients' estates, begin working with them as early as possible in any way you can. Ask your clients if they are comfortable with you sharing communications with their children as well, to develop a theme of transparency and build their trust so that when time comes for the transfer of wealth to them, they are aware of how you've worked with their parents and are more likely to keep their assets with you.
If your client is not comfortable with you communicating with their children, do what you can to provide your client with information they can share with their children to manage their financial priorities, such as college planning or home buying guidance. Though it's definitely more work up front, starting to work with this generation early will be necessary to gain their trust since this won't be a generation that will keep their assets with you just because their parents were.
Working With Gen X, Theme 2: Appeal to Competing Priorities
