The Deloitte Center for Financial Services recently published a very compelling study,
titled The Future of Wealth in America, which reveals some surprising data pertaining to trends in generational wealth.
While most wealth managers primarily cater to the baby-boomer generation (and rightfully so, as they hold 50% of net household wealth) and worry about the burgeoning millennial group, Gen X (born between 1965-1980) becomes a forgotten generation. This despite the cohort appearing poised to have the biggest impact on wealth-management fees over the next 15 years. How, you ask?
Well,
the numbers show that as of 2015 they — or should I say, we, represent 14% of total net wealth and by 2030 that number will double to 31% or $37 trillion in net worth and financial assets of $22 trillion, closing in on the baby boomers.
So in essence, what the research states is that you have 66 million adults in their peak earning years with real concerns like building a nest egg for retirement, affording their children's educations and carrying existing debt. In more simpler terms, what you have is the next big fee source for wealth management.
(More on Gen X: Forget boomers and millennials, Gen Xers need advisers' help the most)
So as top-tier wealth management firms gear up to attract, engage and retain this audience, one looming problem exists that no one seems to want to acknowledge — sameness. Everyone in the advice field looks, feels and talks the same part, making claims that supposedly distinguishes them — experienced, collaborative, independent, trusted, “in it for the long term,” etc.
The irony is that for a business dependent upon personal relationships, everyone comes across as commodity players. The quiet, conventional approach may have worked in the past with a different generation who relied upon established brand names or simply passed-down relationships.
However, for the Gen X demographic, the key is to be two things: focused on their specific needs, and owning a unique value proposition that makes your “investment brand” stand apart. Many Gen Xers, having grown up as the "latch-key kids” (myself included), want comprehensive 360-degree advice from a wealth manager beyond just balancing a risk-adjusted portfolio.
The research shows they are needy, requiring help managing their existing debt (home equity and education), planning for expenses for themselves and family (college education), and building a nest egg for a secure retirement. That's a lot to consider, but when you put all this together, smart firms have the ability to offer a fully loaded incremental value proposition to an audience who is demanding it.
(Related read: The great wealth transfer is coming, putting advisers' businesses at risk)
So what is it that you need to do? You need to position yourself as more than simply a financial adviser. You need to be a jack-of-all-trades — a bespoke CFO, financial concierge, confidante. You need to be trusted, but exceptionally smart, entrepreneurial with true foresight based upon real data. You need to be committed to the true needs of this audience, this generation — it helps to actually be part of the generation so you can speak, act, engage and exist in a truly aligned fashion; be a study of the generation and its unique needs and reinforce an informed perspective in all that you do.
In the end, do yourself a favor and step out and stand for something. Distinguish yourself by addressing your target audience's needs. You can still maintain a low profile, but do your homework. Chances are, you will discover a value proposition, corner a very lucrative market and find a valuable niche. Give it a try — I can give you 22 trillion reasons why you should.
Bob Ireland is a partner and creative director at Sharp Communications, a financial services branding and management consulting firm.
