Practice Management

Don't forget the middle children - Gen X

Getting it right with this unique cohort will also make you better prepared for millennials

Nov 16, 2014 @ 12:01 am

By Wayne Badorf

Advisers have become so focused on serving baby boomer clients and attracting their millennial children that they may be forgetting those in the middle — Gen Xers.

Xers are truly the middle children. For starters, they total 46 million, compared with 80 million boomers and 78 million millennials. They are the offspring of traditionalists and older boomers, and their lives straddle the Atari and iPhone ages.

This generation is all grown up, with the oldest in their early 50s and the youngest in their late 30s. Established in their careers, they are in their peak earning years. Many are senior leaders of companies or well on their way.

Xers deserve your attention and your best financial advice. You cannot rehash a plan or strategy that worked for boomers. Get it right with Xers, and you will be better prepared to work with millennials.

Here are five ways you can appeal to Xers:

1. Build trust with a group that doesn't inherently trust you.

Xers, the latchkey kids of the "70s and "80s, are highly self-reliant. They entered the workforce with the introduction of self-directed retirement and 401(k) plans. They trust their own decision-making process, but they still need your expertise.

This generation is less likely to delegate all decision-making to an adviser, as boomers and traditionalists would, and they benefit from being part of the financial planning process. Rather than tell Xers what to do or merely read their account statement to them, use a collaborative approach.

For example, involve them in the asset allocation discussion. Present choices and discuss the merits of each option. Encourage questions. Have a real discussion, and agree on moves together.

2. Find ways for them to raise their children to be financially independent.

Xers are perhaps the first generation to be uncertain that any Social Security benefits will be coming their way. Meanwhile, they're learning the costs associated with living longer as they watch their parents age and raise their own families.

Xers will appreciate an adviser who says, “Let's take a step back to help teach your kids about money and investments.” You could offer workshops for families. Bring in Xers to learn about saving for retirement or college while their kids learn about saving or hear people discuss their careers.

3. Recognize that retirement may take on a new meaning.

Xers are not as retirement-focused as their parents. They want time to pursue hobbies and to travel, and have already spent years figuring out how to balance work and life. They are OK with working longer if it means they can do the things they want to do.

This is great news for advisers. While you will have a tougher job persuading boomers to rethink retirement, Xers are open to ideas. They will be more accepting of your guidance on asset allocation and what you think their retirement plan can look like.

4. Prove you're an expert on their generation.

When you meet with Xers, talk about how you've helped others their age. Talk specifically about the issues they face: the tax implications of choosing the wrong retirement vehicle, for example. Should they select a traditional IRA or a Roth IRA? Should they fund their 401(k) before funding an IRA?

Become the trusted adviser who discusses the matters Xers need to consider and who helps them along paths they may not have arrived at on their own.

If you blog or tweet, be sure to post material relevant and interesting to Xers. It's an effective way to reinforce the expertise you deliver.

5. Use technology for in-person meetings.

The one thing Xers lack is time. They are in the thick of their careers and raising families. They might not want or be able to sacrifice the time to meet in person. Think webcasts and teleconferences. Think outside 9 to 5 with short meetings and digestible chunks of time. It will be easier to get an Xer to talk for 20 minutes than commit to a two-hour session.

Consider how to break the financial plan into parts, with specific courses of action after each segment.

One way to keep meetings short is to provide information or research beforehand. Rather than take time lecturing on the merits of a risk-conscious investment portfolio, send Xers an article or a video on the topic.

Remember, you don't have to cover everything in one sitting. Xers want to be part of an ongoing conversation.

Wayne Badorf is head of intermediary sales at Wells Fargo Asset Management and president of Wells Fargo Funds Distributor.


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