The Forgotten Generation X
Poor Generation X, sandwiched between two generations that have gotten all the attention. For decades, marketers across all industries (and the financial services industry is no exception) catered to Baby Boomers’ whims and desires, believing that it was this generation that held the purse strings. And Baby Boomers did: Born after World War II until 1964, they worked hard and used their money to fulfill their consumerist desires. Then, Millennials (born 1981 to 2000) became the Next Big Thing—the target of TV commercials, ads and even wealth managers (the slowest industry to catch on). And therein lies the problem: Generation X, born between 1965 and 1980, falls between Baby Boomers and Millennials, so in all our efforts to gain the latter, we’ve forgotten about X'ers. Or have we?
It’s not easy to be Generation X, and not only because this group was once dubbed the “slacker generation” (owing in part to the Richard Linklater movie Slacker). Slackers no more, Generation X'ers have put away their flannel shirts and managed to make it through the U.S. housing bubble. In fact, they were the hardest hit during the 2008 financial crisis, according to a Deloitte report.
However, it’s not all doom and gloom. Generation X is also the generation that Deloitte predicts will experience the highest increase in their share of national wealth through 2030, increasing from less than 14 percent of total U.S. net wealth in 2015 to nearly 31 percent by 2030. That makes this generation wealth managers’ next big fee pool, Deloitte says. Given wealth managers’ push toward marketing to Millennials in recent years, some industry professionals worry that firms have missed the valuable opportunity to reach Generation X. But I say, Never fear! The marketing strategies that wealth managers should already be using to reach Millennials are working on X'ers, too.
To see what I mean, let’s take a look at Generation X. They’re fiercely independent, entrepreneurial, well educated and highly technically literate. They strive for work-life balance and think globally, and they are deeply cynical of Baby Boomer values, such as the pursuit of the “American Dream.” Remind you of anyone? It should. Millennials! To be sure, there are generational differences between X'ers and Millennials. For example, Millennials are true digital natives, whereas X'ers are more or less still "digital immigrants." Also, Millennials value mobility (such as the ability to work remotely) more than X'ers do, likely because Millennials are so tech savvy and independent. Plus—and this difference is key for wealth managers—X'ers still exhibit brand loyalty, whereas Millennials need a company to prove what they can do. In fact, due to the fallout from the financial crisis, Millennials might distrust a well-known financial services firm because of its brand.
And yet, even with these generational differences, the strategies for marketing to Millennials that I have been advocating for years also work on Generation X:
- Digital technology is key to communication: If your firm’s digital communication is limited to email and a bare-bones website, your company is missing crucial opportunities to reach X'ers and Millennials alike. At the very least, firms should be using and regularly updating social media sites such as LinkedIn, Twitter and Facebook to reach current and potential clients. To allay any compliance concerns, establish a firmwide protocol, including a detailed workflow and “sign off” procedure, for all social media posts. Someone who is familiar with social media should be reviewing all posts for relevance and compliance; this work can either be handled in-house, or externally by a consultant. Also, firms that have the resources to create their own smartphone “apps” definitely should do so. Imagine your clients seeing your brand logo each time they look at their smartphone home screens, and easily accessing the information they need through the app. Although creating an app may seem like a drain on time and financial resources at the beginning, the benefits to your firm and your clients can far outweigh the expense.
- Know (and Meet) the Generation’s Needs: Like Millennials, X'ers are highly educated … and they are still paying for it. Yes, although members of this generation graduated decades ago, they may still be paying off student loans. Plus, to make matters worse, they may have a still-upside-down mortgage on top of it. In other words, Generation X is Generation Debt 1.0. Consequently, wealth managers who take a holistic approach to managing clients’ needs will need to consider X'ers’ debt obligations alongside their retirement goals. This may mean advising X'er clients to reduce their retirement contributions temporarily in order to gain traction on paying off debt.
- Your Brand Will Help … But It’s Not Enough: Well-known firms can feel somewhat relieved that their brand will carry more positive weight with Generation X than it does to "Big Bank”-wary Millennials. But that doesn’t mean that you can rest on your brand’s laurels when marketing to X'ers. Instead, when communicating with a current or potential Generation X client, explain precisely what your firm can do to meet that client’s unique needs. This more customized approach can go a long way in differentiating your firm from the competition.
So, is Generation X “lost” to wealth managers who previously overlooked this generation? Absolutely not—and concentrating on this generation now does not have to be at the expense of reaching Baby Boomer or Millennial clients. Embracing technology and communicating your unique value proposition are winning strategies no matter your target generation. Yes, Generation X marks the spot for wealth managers’ next big fee pool, but it’s not an X etched in stone. So as you market to Generation X, don’t forget Millennials either.