Secrets to Working with Gen X and Millennial Clients

Gen X and millennials are often considered two totally different entities and are pitted against each other, particularly in the financial services industry.

Undoubtedly, these are disparate groups and there is some envy directed from Gen X towards millennials because society at large, again including the financial services business, largely glosses over the “MTV generation” focusing more on millennials.

The persistent view that Gen X and millennials are highly different from each other implies the demographics’ values don’t align much, if at all. That can make life difficult on registered investment advisors (RIAs) that are looking to cater to both groups – a strategy that makes a lot of sense when considering Gen X, then millennials are going to be the biggest beneficiaries of the much ballyhooed great wealth transfer.

Perhaps allaying advisors’ concerns is a recent report from Spectrem Group that indicates views on major life milestones, money and related matters among Gen X and millennials really aren’t as different as previously thought.

What the Survey Says

As is to be expected, outlooks on finances and success are not uniform across Gen X and millennials, but the Spectrem Group survey indicates there are enough similarities between the two groups that advisors don’t have to stress about developing entirely unique approaches for these clients.

“Both wealthy Millennials and Gen Xers define success as being financially independent and financially stable. These goals are not necessarily different than previous generations,” according to the study.

While not exactly the same in most cases, the percentages of Gen Xers and millennials that view particular issues as definitions of life success are comparable. Those issues include financial independence, financial security, job security, home ownership, marriage, being passionate about work, having a family and education, among others.

Of note to advisors are the points that Gen X and millennials are less “bullish” on having families, getting married and owning a home compared to baby boomers.

“Former definitions of success have become expectations of current generations or have been pushed aside for different aspirations,” noted Spectrem.

Something else for advisors to note is that social media use is prevalent among both GenXers and millennials. In fact, social media can provide valuable insight into the financial needs of Gen X and millennials because, be it Facebook or Instagram or the like, that’s where so many members of these demographics go to highlight change of life events, including new jobs, marriages and –forgive me for being gloomy – deaths of boomer parents/relatives.

How GenX and Millennials View Advisors

Of course, the advisor/client relationship is a two-way street, meaning it’s relevant to advisors how GenXers and millennials view them.

Small percentages of clients from these demographics fall into the following three classifications: Working with their parents’ advisor and another advisor, eschewing their parents’ advisor altogether or those that admit their parents told them to not use their advisor.

What’s telling is that GenXers and millennials, according to the Spectrem survey, that make more money are more likely to use their parents’ advisor. For example, 91% of clients in those groups that make $150,000 to over $500,000 are apt to use the same advisors as their folks.

Advisors should also be up to speed on how clients from these age groups find them in an effort to gain clarity on how to better direct marketing expenditures.

“Investors at lower levels of income are more likely to find their advisor through a referral, while those investors with higher income are more likely to have found their advisor through a general advertisement, or an advertisement or article in a financial publication,” said Spectrem.

Related: How to Have the ESG Conversation with Clients