Learning and profiting from Gen X

Too many of us have not evolved and still have firms built to serve baby boomers.

Today’s era represents the first in history where almost every generation is learning how to interact with the world from their children. Our kids teach us how to use social media, and we teach our parents how to use Netflix. This has led to a manic fascination with millennials and how they consume. The generation born after 1984 certainly is at the crosshairs of innovation; however their parents, the Gen Xers who were born between 1965 and 1983, serve as a superior barometer of whether a company is going to make money or not. Their behavior can provide invaluable insights into how to be successful in our industry for the next few decades.

While Snapchat and Instagram are great stories, Facebook and LinkedIn are money makers because they are used by Gen X. The tipping point for any company happens when the 35- to 50-year-olds begin adopting them because they will drag their parents along.

Netflix and Amazon make their money by providing services to those who will be clients for decades to come. I’d like to suggest that this is true for our industry, too. We should be building firms that concentrate more on Gen Xers. Too many of us have not evolved and still have firms built to serve baby boomers.

KEYS TO CAPTURING GEN X
Generation X has grown up with a specific set of preferences when buying products and services:
• Convenience. This is a time-strapped generation. They’re busy working and raising children, and they maintain high personal standards for themselves in everything they do. They want products that make their lives easier. Amazon is a staple in most households because it removes the need to go to a physical store; Netflix allows you to watch on your phone wherever you happen to be. Convenience is the single most important trait of great companies. Yet most of us still expect clients to come to us on our terms. That might work for baby boomers, but not for this generation.

• Design. Apple, Starbucks and Lululemon are all obsessed with the look and feel of their brands. They go beyond the obvious design elements to delight clients with the entire shopping experience. Gen Xers care about aesthetics, but they also want consistency of brand and predictability. Isn’t it odd that most firms still feel like Chicago libraries with an abundance of wood paneling and big oak desks? More importantly, many advisers are still treating their clients the way they did two decades ago. Gen X expects a collaborative, modern experience from us. We need to reinvent ourselves and work with clients the way any great brand does.

• Values. Whole Foods stands for healthy eating. Nike is all about healthy living. Facebook is a home for sharing what you care about with your loved ones. Every successful brand has a clearly defined set of values which are demonstrated throughout the customer experience. How clearly articulated are your purpose and values and does that resonate throughout your client experience? Can your clients show friends why you are special?

OUR INDUSTRY
Across the business spectrum, successful firms have reimagined the client experience and seamlessly integrated technology to make every customer feel special. Our industry is far behind.

Whether you have a small local firm or a larger regional advisory practice, applying some of these principals to your firm will help ensure your relevancy to the generation that will pay your bills for the next 30 years.

Millennials (and a small subset of others) might like how cheap and easy it is to manage a portfolio with a robo-adviser, however these tech-only investment firms are not yet a real threat to capture Gen Xers who have complex financial lives and cannot afford to get it wrong. They want human judgment to help simplify and navigate a complex financial voyage, but not the way most of us are doing it now. Most Gen Xers don’t expect the same service experience their parents had.

It should be no surprise to anyone who follows me that this conviction is what drives the company I founded and lead today, but there’s opportunity for everyone if we commit ourselves to getting this right. Gen X needs us, we just need to meet them where they are.

Joe Duran is chief executive of United Capital. Follow him @DuranMoney.