It is possible to maintain a successful practice when your baby boomer clients are spending down their assets. Ensuring that your clients – and the subsequent generations – understand the value you provide is the key to your ongoing growth and success.
Unlike your baby boomer and older clients who looked to you to (almost) handle everything, Generation X – the latchkey generation – was raised to be self-sufficient and holds the view that they will come to you for advice when they can’t figure it out on their own. The first generation to grow up with computers, these children of the “information age” are the forefront to the future generations raised on social media and the internet.
A smaller group than the baby boomers – Generation X numbers approximately 50 million compared to the roughly 76 to 79 million boomers – this generation did not hold as much influence and sway on the social strata as their predecessors, but they are not a populace to underestimate. As your baby boomer clients approach retirement, hard-working and well-employed Generation X (approximately 65 percent of them are working full time) may very well be the revenue stream to keep your business moving forward.
Adapting to this group – and those who are closing up the gap behind them – may require you to adjust your service models to accommodate their preferences, style and needs.
• Offer estate planning for parents of young children.
The majority of Generation X are married and most – approximately 74 percent according to a 2013 Met Life study – have children, including blended families from prior relationships. And while most understand the need for estate planning, they may not perceive it as a priority while they are working, raising children, paying off debt and dealing with aging parents. Incorporating estate planning as part of the overall financial picture underlines how important the process is, especially if they have children. Underlining the need to provide stability and answers establishes you as a trusted partner in the process.
• Provide the ability to consolidate multiple employer-sponsored retirement accounts (rollovers) in one place.
Generation X entered the workforce in the dawn of the 401(k) plan. Pension and profit-sharing employer plans were in the waning days, and most were not able to enroll in those product offerings as employers shifted to retirement plans offered by larger broker-dealers and mutual fund companies. Gen X were among the first to encounter the need to “roll over” those assets upon moving from employer to employer – a stark contrast to their parents who typically remained with one employer for the duration of the career. Surprisingly, over 40 percent of this group has been with the same employer for 10 years or more. But the remaining 50 percent have slightly lower tenure – anywhere from one to nine years with a particular job, according to The Met-Life Study of Generation X done in April.
Provide them a place in which they may consolidate the record keeping for the myriad of rollover and employer-sponsored accounts they hold. Streamlining this information helps them get a better view of their overall financial picture and helps them identify where they can improve asset allocation. Offering a full-service Web site is helpful when working with this group – 52 percent of Generation X believe such a site is important when working with their IRAs, according to Fidelity Investments' 2008 Study on IRAs.
• Educate on long-term care needs.