When I was planning a speaking engagement a few weeks ago, the power of generational differences came home to me in a personal way. Simply stated, the woman hiring me wasn’t contacting me as often as I liked, ideally by phone. I felt as though my event wasn’t important to her, which upset and frustrated me.
Once I recognized the age gap between us (she was a Generation Xer; I’m an older baby boomer), I realized we simply had different generational preferences. The lesson I learned—to take less to heart the infrequency of her communications, usually texts or emails—greatly improved our relationship.
It amazes me that I wasn’t conscious of such generational contrasts before. Investigating further, I found that some authorities say the differences between millennials, Generation X and baby boomers may run much deeper than those between previous generations.
Peter Brinkerhoff, author of “Generations: The Challenge of a Lifetime for Your Nonprofit,” said in an article on The Huffington Post, “It’s not just age difference, it’s a cultural difference.” He cited smartphones, Facebook and Wi-Fi as some of the technological innovations that have erased work/life boundaries by keeping younger generations connected around the clock.
It’s crucial for advisors to understand these differences and adapt their style to that of the generation they’re working with, be it a client or an employee. As generational consultant Cam Marston reminded me, the younger market looks more and more appealing to the average 56-year-old male advisor than his own age group (see “Under 55 and Underserved” sidebar).
While the 45–50 million Generation Xers and 80–85 million millennials together outnumber the 75-80 million baby boomers, many advisors continue to use boomer tactics with these two groups and offer financial services created with boomer clients in mind.
“Advisors are approaching the youth market in the same way they approach their [age] peers,” Marston said, “and the messages, sales tactics and ways to connect with clients are proving ineffective.” Furthermore, this habit can risk losing younger clients in a heartbeat. “It’s an ingrained way of doing business that doesn’t support the future of advisory practices,” he said.
Marston, the author of several books including “The Gen-Savvy Financial Advisor: Advising the Generations in the New Age of Uncertainty,” became interested in generational differences about 15 years ago. While reviewing surveys conducted by his North Carolina research firm, he noticed that responses often differed by generation. His search for explanations led him to found Generational Insights, a Mobile, Ala., consulting firm that helps organizations target and manage younger generations of clients and employees.
Aided by the observations of Marston and others, let’s examine these different characteristics by putting the spotlight on millennials—the youngest and least well-known generation of potential clients and employees. (The date spread I’ve indicated for each generation is approximate; some demographers move the brackets forward or back by one to three years.)
MILLENNIALS: BORN 1982-2000
(Aka Generation Y, Generation Next)
Millennials, the children of the baby boomers, are often labeled as overindulged, self-centered and indifferent to authority. As Joel Stein wrote in the May 20, 2013 issue of “Time,” the “Me Generation” begot the “Me Me Me” generation. However, other observers note that millennials are looking for meaning in what they do, with the goal of making a difference in the world. Considering that they comprise a huge 30% of the U.S. population, this offers hope for the future.
In Marston’s view, this generation’s most powerful influences were the explosive growth of consumer credit and the Great Recession. Helicopter parents were another big factor, hovering protectively to shelter their millennial children from hardship. These moms and dads praised their kids and awarded them prizes for trying their best—or in some cases, just for showing up.
As a result, many millennials grew up with higher self-esteem than their limited successes warranted. Raised to feel special, as adults they are hypersensitive to criticism and tend to need more frequent positive feedback than older generations.
In addition to being a very social group under the constant influence of their friends, millennials retain fond memories of and connections with their parents. (One-quarter of millennials come from single-parent families.) Marston noted that they often check in by phone to ask their folks for advice. Generally, however, texting is their preferred method of communication. “You’ll often find a millennial texting productively in the middle of a business meeting,” he said. “They are adept at multitasking.”
Interestingly, some observers suggest that lifelong use of computers has shaped millennials as “mosaic thinkers,” drawing bits of information from a variety of sources to piece together an opinion or a decision, compared with earlier generations’ more linear thinking.
Financially, millennials have a long road ahead of them. They will need to save an estimated 19 times their salary to retire comfortably, Marston said. Opinions differ about their willingness to save. In the Huffington Post article, Will Pearson, co-founder of “Mental Floss,” a magazine popular with millennials, called them responsible savers who “start saving for retirement four years before Gen X did and 10 years” before boomers. But Marston noted that many fail to maximize their 401(k) contributions or don’t contribute at all. In any case, the recession made many millennials so risk averse that they tend to avoid the stock market.
With an unemployment rate for their generation that hovered around 13% in January 2013, they have learned to be skeptical of such promises as “If you go to college, you’ll get a good job.” Some, in fact, are “intensely distrustful of every government institution except for the military,” as a graduate student recently ranted in PolicyMic.com, an online forum for millennials. “We have little or no reason whatsoever to trust anyone over 33” (currently the age boundary of the millennial generation). Sound familiar, boomers?
Millennials’ negative view of financial advisors corresponds with their recession-fueled distrust of financial services. To approach them as potential clients, your focus needs to be on the individual and his or her future, not on yourself and your pedigree. If you create a proposal for them, make sure to explain your research and thought process. Be clear about how you are compensated, Marston advised; millennials who feel they’ve been tricked will be gone for good.
It’s OK to ask for their business directly, but don’t make every message a sales one. Your goal, according to Pearson of “Mental Floss,” should be to build trust in your brand by offering free things they will want to share with others. For example, “Mental Floss” creates e-postcards with trivia that followers can share on Facebook.
Needless to say, you also need to become comfortable with communicating the way millennials themselves connect with each other: via instant messages (IMs), texts and other tech-forward methods.
They may sound like a cynical, highly pressured group, but millennials love to have fun with classic memories of childhood. The “I Can Has Cheezburger” meme has led to zillions of goofy cat videos, and they’ve built a whole subculture around bacon. Whimsy in your own communications is fine if it’s genuine—“quirk in an authentic voice,” as Pearson described it.
As employees, millennials expect their time and commitments to be flexible. These “children of Google” prefer to do the job when and where they like, not necessarily at the office between 8:30 and 5:00. Continuously connected, they carry their work responsibilities with them 24/7. By the same token, they see nothing wrong with letting personal tasks overlap into conventional work time. According to “Generations” author Brinkerhoff, “If you have policies against IMs and Facebook [at the office], you are cutting off powerful tools of the millennials. If you’re worried about them wasting time, simply give them more work.”
The best way to avoid friction around these issues is to be straightforward with millennial employees about the outcomes you expect. They value clear direction, accountability and involvement in decision-making. Adept with technology, they demand instant feedback from you. Accustomed to abundance, they work not for money but for self-actualization. Achievement and affiliation are important to them.
How can you meet more of these younger folks? An introduction through their boomer parents may help, Marston said, but you’ll need to shift your style from the boomer service model to that of the millennials. For example, if a millennial wants guidance on investments that focus on green companies or emerging economies, be willing to create a plan that supports these values.
Once you start working with a millennial client, don’t forget the parents. Neil Howe, co-author with William Strauss of “Millennials in the Workplace,” wrote that “Managers will resist, but [they should] partner with parents. Parents are part of the conversation.”
GENERATION X: BORN 1965-1981
(Aka the Baby Bust Generation)
Gen Xers are mid-career now, married or divorced and raising kids. They tend to be more informal on the job than older employees and like to work nontraditional hours, sometimes resenting work that interferes with their social life.
Boomer bosses, interpreting this as a lack of commitment, dubbed them “slackers.” However, Marston said, “the truth is that Gen Xers simply reinterpreted how the job gets done. By and large, they’re getting it done well.”
Growing up as latchkey kids, members of this generation became used to fending for themselves. Their youth was marked by such upheavals as the Vietnam War, Watergate, AIDS, the Iran hostage crisis, the Challenger disaster and Chernobyl. Multiple market corrections in their youth and early adulthood made them wary of investing and contributed to their distrust of financial advisors. The just-in-time arrival of personal computers, then tablets and smartphones, gave them the tools to become self-informed instead of having to buy someone else’s expertise.
Financially, though, Gen Xers are falling behind. “They lost more equity and net worth due to the Great Recession than any other generation,” Marston observed. Social Security’s uncertain future means they may need to save more for retirement than boomers did, but “they’re not saving enough.” He noted that when they do save they’re risk-averse, choosing cash or bonds over the stock market. They like short-term goals: six months or a year at the outside. Many are stuck in their jobs, unable to advance because baby boomers have delayed retiring.
“Keep it simple, brief and future-focused” when you talk to them, Marston advised. These are tough customers, guarded, tech-savvy and smart. They “are not interested in your pedigree, your years in the business or your professional designations,” so don’t expect automatic deference to your professional standing. Be sure to keep your online reputation pristine because Generation Xers are going to check you out, and they aren’t shy about challenging phonies. Encourage them to research your reputation and suggest how they can do it online.
When possible, talk about other Gen X clients you serve, Marston suggested. And be sure to have your suite of apps and online tools at the ready.
You don’t want to ask outright for the business or be too aggressive with Gen Xers. Follow up regularly, see if they have questions and ask, “How can we get started?”
As employees, Gen Xers combine some characteristics of both millennials and boomers. They are independent and resourceful problem-solvers who want to know the real-world relevance of their work (see “You Talkin’ to Me, Sarge?” sidebar). And they like to have fun: Games, skits and “edutainment” can be effective ways to reach them.
BABY BOOMERS: BORN 1946-1964
Most boomers are now entering retirement, getting close to it or thinking seriously about it. Raised in the economic growth era of the ‘50s and ‘60s, they experienced a long-lived bull market, the civil rights movement, women’s lib, moon landings and the fall of the Soviet Union. As a result, they tend to be optimistic and idealistic, with a “can-do” confidence that younger generations don’t share. Older boomers, especially, believe that trusted institutions such as Social Security will keep their promises.
Boomers are buyers, spending $2 trillion a year. The Great Recession’s triple whammy of a market crash, a drop in home values and rising unemployment substantially dented most baby boomers’ already-inadequate savings, prompting many to delay retirement. This “sandwich generation” also contributes financial support to their children or grandchildren as well as elderly relatives. Any inheritance they might have hoped to receive is dwindling due to their parents’ greater longevity and higher health care costs. In consequence, some boomers may be experiencing financial anxiety for the first time in their fortunate lives.
Boomers enjoy connecting interpersonally and empathize well with each other, so the best approach is to meet with them face to face. (Using today’s communication technologies can backfire: Text messaging may seem too casual, and emailing could suggest that the subject matter is unimportant.)
Advisors should use this face time to introduce themselves and tell their own story: where they came from, how long they’ve been in the business, what kind of clients they serve. It can be beneficial to share an affiliation with something that’s tried and true. Ties to the community, to a certain college, even to a particular hobby may help firm up a relationship.
MATURES: BORN 1922-1945
(Aka the Greatest Generation, Silent Generation, etc.)
Building strong relationships with matures, as with boomers, entails telling your story. They want to know your background, your accomplishments, your awards and your connection with brands they trust. Patriotic ties will help you reach this highly patriotic generation. They tend to prefer face-to-face communication, not emails or text messages.
Very few Generation X or millennial advisors have the opportunity to work with this generation, most of whom are already served by a mature or boomer advisor.
DEALING WITH MULTIPLE GENERATIONS AT ONCE
If a family business is your client, requiring multiple generations to meet at your office, how can you negotiate these differences?
“The advisor needs to give preference to the main decision-maker, but at the same time speak to all generations in the meeting,” Marston counseled.
In other words, being part of the family business’s team shouldn’t stop you from customizing your plan for each person in the room. For matures and boomers, you’ll want to talk about your background and credentials; for Generation Xers and millennials, you’ll also need to focus on how this capability will serve the individual client going forward. You can adopt different methods of communication: phone or face to face with boomers and matures, and emails, IMs or texts to Gen Xers and millennials.
In my seminars, I encourage participants to try on something new for size. If the shoe fits, add it to your wardrobe; if it doesn’t, don’t force it. So if any of the suggestions offered here feel phony to you or don’t fit a particular client, or if an individual behaves more like another generation than the one he or she was born into, use your good judgment. These are guidelines, not guarantees.
The most lasting client relationships will come from tuning into each person you see: their own personal uniqueness, as well as their history, goals, hopes and dreams. Generational differences comprise another useful lens through which to glean insights about some of the individuals and couples who cross your path. When you use this perspective appropriately, it will deepen the connection. When it doesn’t apply, let it go.