Generation X usually isn't perceived as being ready for prime time when it comes to financial planning, but consider a couple of stats regarding this demographic. Take a look at a recent study by The Phoenix Companies that studied high-net-worth individuals with at least $1 million in investable assets. Among this universe of paper millionaires in America, the age group with the highest percentage of people with more than $2 million was Generation X, at 47%. The total sample survey-which also comprised baby boomers and their parents' generation-was 39%. And a four-year-old survey conducted by MainStay, a division of New York Life Investment Management, found that Gen Xers had an average household income of $144,000 versus $131,000 for boomers and $87,000 for the boomers' predecessors.

The latter data is somewhat dated, but the overall trend isn't, and the point is that Gen Xers-a group roughly defined as 32 to 43 years old-have basically outgrown their slacker stereotype and roared into adulthood with greater wealth potential than their parents' generation. Granted, many of them are at a stage in life where they're focused on such matters as accumulating assets, growing their businesses and saving for their childrens' college, but some of them already have an eye toward their retirement savings because they're acutely aware they probably won't have Social Security and pensions as safety nets. The result: Many are actively engaged in planning for their retirement at a younger age than the boomer generation, and they want professional help to guide them.

"I tell financial advisors that if they're going to be in this business beyond the next five to ten years, they have to pay attention to this group," says Walt Zultowski, senior vice president of research and concept development at The Phoenix Companies, a life insurance and annuities company in Hartford, Conn. "They are significantly different from other high-net-worth people we've dealt with before."

Different, they are, and advisors who serve the Gen-X marketplace should expect to play ball differently with this generation than it did face to face with previous generations. "They want to work with a lot of advisors, they want information, and they want to be involved," says Zultowski. "In a sense, they want to be the general contractor" that directs all of the input regarding their retirement savings.

That's a different approach than the "quarterback" model that some comprehensive planners use to coordinate the various financial aspects of their clients' lives. But despite Gen X's desire to maintain a sense of control over their portfolios, Zultowski notes they're also the group least likely to take the time to properly manage their finances.

For now, the advisory business is mainly focused on boomers and the generation before them. This is particularly true for older planners who have grown up in the business along with their older clients. "Advisors have a peripheral knowledge of Generation X," says Steve Gresham, senior vice president of asset management at The Phoenix Companies. He and Zultowski are collaborating on a book called The Gen X Advisor. "Gen X is like a musical group or movie they've heard of but haven't seen because it's not a generation in their world."

Gresham says that Gen Xers have more information at their disposal, are more careful about who they listen to, and have a greater sense of self-direction when it comes to financial information. "They won't necessarily bow to what the advisor says," he notes. "Advisors can see that as a threat to their authority. And a lot of advisors have told me that they're not interested in training another generation as clients."
Indeed, there can be a lot of upfront education and planning work for advisors with their Gen-X clients. "Initially, younger clients may need extra attention," says Bobbie Munroe, owner of Fraser Financial, a planning firm in Atlanta. "They lack experience on almost everything."

But Munroe says there is potential value in entering younger people's lives during their formative financial years. "With guidance at an early age, the up-and-comer is likely to become an 'A' client," she says.

Kirk Kinder, the 37-year-old owner of Picket Fence Financial in Bel Air, Md., counts about a dozen fellow Gen Xers among his 40 clients. He says most of them come from dual-income households earning $100,000 to $150,000, and on average most of their assets are tied up in 401(k) plans or in their homes. "There's not a lot of comprehensive planning to do," he says. Kinder says those with a lot of taxable assets outside of their 401(k)'s often prefer just doing a financial plan or getting advice at an hourly rate. A few are on retainer at a full-year rate of $2,500 to $5,000.

Kinder says his Gen-X clients are detail-driven and want to understand why he recommends certain courses of action. "I have to be prepared to show them some serious analysis," he says. "Advisors who aren't providing good financial planning services are going to have to shift their approach as Gen Xers get older. Advisors are going to have to work more for their money."