Serving 65+ year-old retirees? Young doctors recently out of med school? Or self-employed, small business owners?
Whatever your niche, the first thing an independent advisor needs to do is narrow in on their ideal client—the individuals your firm is seeking, what makes them tick, and how you can best serve them. This may seem obvious, but in addition to their profession, one important consideration is your client’s age. Specifically, the generation they come from.
Now for the less obvious part: Gen X and Millennials have different preferences. They’re subtle but important. The firms that can accommodate these nuances and cater to each generation appropriately stand to earn trust with clients in both groups, win long-term clients, and ride the wave of the forthcoming $80 trillion dollar wealth transfer.
In this article, we’ll break down the key differences between Gen Xers and Millennials, as well as tips for serving both.
—
Gen X vs. Millennials: Key Differences Financial Advisors Should Understand
Psychology
Gen X, born from 1965 to 1980, are pragmatic yet skeptical. Now in their peak earning years, they are also juggling competing financial priorities like mortgages, kids’ education, aging parents, and their own retirement. To best serve them, highlight how you’ll help them build stable, realistic financial plans.
Millennials, on the other hand, born from 1981 to 1996, are goal-oriented and optimistic. Having come of age during the 2008 financial crisis, however, they can also be cautious with money, and value both security—avoiding major mistakes—and purpose, i.e. using their money to gain financial independence or live a full, meaningful life. Show Millennials how you’ll minimize their financial risk while putting them on the path toward the life they envision for themselves.
Expectations & Planning
In searching for a financial advisor, Gen Xers will look for a customized, holistic experience, rather than a narrow, transactional one. They’ll want practical, personalized plans that address both near and long-term goals—in a nutshell, a “one-stop shop” for financial advice. Advisors who can, for instance, come up with detailed plans for how to save for a child’s college while putting money aside for retirement will be best-suited to meet Gen X’s needs.
Millennials, likewise, want personalized, holistic financial planning, with the additional desire for education and empowerment. These clients may bring a set of personal values to the table—i.e. a desire to build an ESG portfolio—and live by the mantra “do it with me, not for me.” Advisors who are ready to coach younger professionals will be well-served to capture Millennial clients.
Fees
When it comes to fees, Gen X will be more comfortable with a traditional AUM fee model—provided that you can demonstrate return on those fees over time. These clients are older and pragmatic, so they’ll pay for value, if you can demonstrate it.
Millennials, meanwhile, may prefer alternative fee structures, including subscription-based or flat fees. They’ll expect you to use technology to keep costs down, may want to negotiate, and will respond well to unbiased, incentive-aligned advice.
Communication
Gen X will appreciate in-person meetings, though favors digital communication, specifically over email. Expect to communicate with them periodically, likely every quarter. These clients won’t expect hand-holding, but plan on returning their phone calls or emails within a reasonable frame.
Millennials, who came of age in the era of smartphones, texting, and social media, are digital-first communicators, and will heavily favor email and video chat. More than Gen Xers, they will expect instant, on-demand communication (i.e. texting) and might desire more frequent communication than older clients (i.e. monthly check-ins).
Technology
As for technology, Gen X is tech-savvy and knows how to navigate Google and other web portals, but they’re not as app-centric as younger clients. They’ll expect you to be tech-enabled to streamline your services, but they’re not looking to self-serve, so use technology to demonstrate privacy, security, and efficiency.
Millennials, on the other hand, are digital natives, with a strong preference for tech-driven services. They’ll want on-demand information and seamless digital interactions, but aren’t looking for fully automated financial solutions, so use technology to automate routine tasks, respond quickly, and add convenience and value.
Outreach
Finally, Gen X is looking for financial advice that’s informative, genuine, and low-pressure. They won’t respond to hard sales or gimmicks—so don’t try them. Video content and seminars will work well—just remember to be sincere and confirm your credibility through client testimonials and success stories. You’ll find Gen Xers via traditional (TV and print) and digital media (newsletter, LinkedIn, etc.).
Millennials, by contrast, want financial advice that’s digital, authentic, and values-driven. A strong, credible online presence is key, with a modern, mobile-friendly website, a bio, your client profile, and what you offer (sharing your fees upfront is a good idea). Remember, they’re looking for an advisor who’s relatable, and shares similar values and experiences, and you’ll find them via social media and content marketing.
—
While there’s certainly some overlap, Gen Xers and Millennials differ in several key ways. Recognize and adapt to the subtleties and your practice will benefit.
