22 Trillion Reasons Why Gen X Marks the Spot

by Sharp | April 22, 2016

Sharp Partner and Creative Director Bob Ireland is back in the news this week with a thoughtful Op-Ed in Investment News. Bob, whose recent work focuses on branding in the financial services, management consulting and real estate industries (among others), offers insight into positioning for wealth management firms. The piece is copied below and available on InvestmentNews.com.

The Deloitte Center for Financial Services recently published a very compelling study, titled The Future of Wealth in America, which reveals some surprising data pertaining to trends in generational wealth.  While most wealth managers primarily cater to the Baby Boom generation (and rightfully so as they hold 50% of net household wealth) and worry about the burgeoning Millennial group, the lost or forgotten generation otherwise known as Gen X (born 1965-1980) appears poised to have the most impact on wealth management fees over the next 15 years. How you ask?

Well, the numbers show that as of 2015 they – or should I say we – represent 14% of total net wealth and by 2030 that number will double to 31% or $37 trillion in net worth and financial assets of $22 trillion, closing in on the Baby Boomers.   So in essence, what the research states is that you have is 66 million adults in their peak earning years with real concerns like building a nest egg for retirement, affording their children’s education and carrying existing debt.  In more simpler terms, what you have is the next big fee source for wealth management.

So as top-tier wealth management firms gear up to to attract, engage and retain this audience, one looming problem exists that no one seems to want to acknowledge – parity.  Everyone in the field looks, feels and talks the same part, making claims that supposedly distinguishes them – experienced, collaborative, independent, trusted, “in it for the long term,” etc.  The irony is that for a business dependent upon personal relationships everyone certainly comes across as commodity players. And of course there is the arrogant industry-wide stance of “not wanting to be known.”  Good luck with that given the opportunity at hand.

The quiet, parity approach may have worked in the past with a different generation who relied upon established brand names or simply passed-down relationships.   However, for the Generation X demographic the key is to be two things – focused on their specific needs and owning a unique value proposition that makes your “investment brand” stand apart.  Having grown up as the ”latch key kids” (me included), they want comprehensive 360-degree advice from a wealth manager beyond just balancing a risk-adjusted portfolio.  The research shows they are needy, requiring help managing their existing debt (home equity and education), planning for expenses for themselves and family (college education), and building a nest egg for a secure retirement.  That’s a lot to consider, but when you put all this together, smart firms have the ability to offer a fully loaded incremental value proposition to an audience who is demanding it.

So what is it that you need to do?  You need to position yourself as more than simply a financial advisor, broker, wealth manager or Retirement Investor Advisor. You need to be a jack-of-all-trades – a bespoke CFO, financial concierge, confidante – you need to be trusted, but exceptionally smart, entrepreneurial with true foresight based upon real data.  You need to be committed to the real true needs of this audience, this generation – it helps to actually be part of the generation so you can speak, act, engage and exist in a real aligned fashion.   Be a study of the generation and its unique needs and reinforce your learned perspective in all that you do.

In the end, do yourself a favor and step out and stand for something. Distinguish yourself by addressing your target audience’s needs. You can still lay in the weeds (maintain a low profile), but do your homework in the meantime, so when a big fish comes along … chances are you will discover a valuable proposition, corner a very lucrative market and find a real valuable niche.  Give it a try – I can give you 22 trillion reasons why.

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