The Gen X and Gen Y populations have grown up. They are earning money, spending it and have become a growing important consumer to marketers worldwide. In addition, according to Gabe Garcia, Director at Pershing Advisor Solutions, “Gen X and Gen Y will inherit more than $41 trillion in assets by 2052, most of that wealth coming from their Baby Boomer parents”. Make it a point to have your clients introduce you to their children so you can begin to establish a relationship.
Independent financial advisors who are not targeting Gen X and Gen Y as clients will pay a steep price in the next decade as their Baby Boomer clients transition from wealth accumulators to wealth distributors. These up-and-coming young adults are considered the future of financial planning and are the clients you will need in order to grow your business in the years to come.
Reshaping your practice to accommodate and attract this rising generation of investors will surely put you ahead of the game. But before you can market to them, it’s important to understand them. Thinking your clients’ kids will automatically continue with you is setting yourself up for failure. These generations are less loyal and more flexible than their parents, having grown up in a flexible world, and expect more flexibility in return. Being the first generation to have two working parents, they are more likely to have flexible work schedules, family leave options and many more options than their parents did. To suit them, you must also be flexible and be able to offer them a range of options, and be ready to cater to their particular demands.
They are more knowledgeable about technology than previous generations, and they use it. Gen Y is the first generation that grew up with the Internet, and these young adults are used to having everything at their fingertips and getting their information quickly. You need to be where they are: on the web, mobile and on social media. And, you need to geo-target them on a local level. If you ever present to generation Y, that the most effective way is through a computer or tablet as they are more comfortable reviewing and processing the information.
With a reputation of not saving, your job is to make financial investment exciting so that they begin to think about their financial future. Think about your business and how you can repackage it to attract [and keep] their interest. The goal is to engage these potential clients at the product level, company level and experience level to gain their trust. Rewarding them for their loyalty is a must. Doing so they will most likely stay loyal to you.
Being more in tune with what’s going on in the world, Gen X and Gen Y tend to be concerned about things to come. Your job is to connect to them by showing interest and listening and showing how your products and service can help them now and in the future. Connecting to them creates a sense of loyalty. Engage in active dialogue through one-on-one meetings, social media and live events. They will feel heard and appreciated as they connect to you and your products.
Another important factor to consider when marketing to the Gen X and Gen Y group is that they are more diverse than any other generation when it comes to race, ethnicity and culture. Many speak foreign languages or have a family structure that is culturally diverse. It’s important that you are able to connect to them at this level. Consider learning Spanish, for example, or hire people that speak other languages. Explore and understand how finances and investing are viewed for particular ethnic groups. Gen X and Gen Y’s, though having their own mindset and way to do things, are ingrained with the principals instilled by their parents and previous generations. Once you understand their culture, you can use it to show them the importance of investing and building a financial future.
As Gen X and Gen Y continue to make their way in the world, they are going to be seeking out financial advisors and firms that truly understand them and work the way they do. Summit Brokerage can help advisors develop marketing and practice management strategies to gather more assets from these generations.