Wealth Perspectives

High net worth Gen Xers: "Do-it-yourself" generation

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Advisors: Gen Xers need your help. They just don’t want to ask for it.

Mike Van Wyk, Capital Group’s vice president of Customer Research & Insights, shared new research on the unique generational needs of high net worth Gen X clients at Schwab IMPACT 2018. During his presentation, titled "Millennials to Boomers: Better high net worth planning by generation,” Van Wyk revealed data on Gen X and corresponding actions advisors might consider to serve them best.

Snapshot

  • 70% of Gen X know they are Gen X
  • But seven out of 10 Gen Xers don’t think they are unique as a generation
  • Gen X’s self-identity is defined by their work ethic

They are…

Defined by family and work ethic

  • Six out of 10 Gen Xers say being a parent is a very important part of their identity
  • Gen Xers are two times more likely than Boomers to say their financial choices are influenced by family
  • Gen X members trust themselves almost two times more than anyone else, including a financial advisor
  • Work ethic is what Gen Xers think makes them unique

Laser focused on retirement

  • 70% say retirement is their most important financial priority

Trying to go it alone

  • Gen Xers are least likely to say they are conservative investors (45%)
  • Just over 25% trust financial services
  • Only half trust financial advisors
  • Gen Xers are least likely to have a financial advisor
  • Less than half think they will retire by their ideal retirement age

Gen X: Trust themselves first



Gen X persona: Do-it-yourselfers who need help but don’t want to ask

Meet a generation that wants to be shown, not told.

Many Gen X investors grew up as “latchkey children” and have been do-it-yourselfers since childhood. Gen X investors are unique because they are largely self-directed and trust themselves more than advisors.

There’s still opportunity for advisors. Gen X investors are highly curious, worried about their financial readiness for retirement and willing to tolerate volatility to find the best way to prepare for retirement. If there’s one guiding force for Generation X, it is family. Gen X is twice as likely as Boomers to allow family considerations to steer financial choices. Help Gen X do their own research and focus on long-term family goals, and you’ll win hard-earned trust with them.

Gen X action plan for advisors: Build trust.

The challenge is trust. Gen Xers are skeptical. Only a quarter of Gen Xers trust financial services and only half trust financial advisors.

Make family first. Look for opportunity in “moments of truth” like college planning, divorce and the sale of a house. These life events are acutely important to Gen Xers because they touch the heart of their family. Helping Gen Xers navigate these events is key to teaching them to value financial advice.

Be ready for an aggressive attitude. Many Gen Xers know they aren’t on track for their financial goals. They often respond with an aggressive investment approach. Half of Gen Xers say they prefer higher-risk investments with the potential of higher reward (+12% vs. Boomers), and they are the least likely generation to say that they are conservative investors.

Show, don’t tell. Their DIY attitude and natural skepticism means that they want to put some of their own effort into understanding and approving decisions. More than half of Gen Xers research investment opportunities themselves, more than other generations.

Ty Summerlin
Senior Wealth Advisor of HoyleCohen

 

Ty Sumerlin, Senior Wealth Advisor of HoyleCohen, discusses his firm’s experiences working with Gen X clients

More in this series about HNW generations

High net worth Millennials: Savvy with high expectations

High net worth Boomers: Settling into retirement


HNW generations: By the numbers

An at-a-glance look at data that define your clients’ generations

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HNW generations: Action plan

Enhance your effectiveness as an advisor by understanding your clients’ generation

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More about high net worth:

3 secrets of high net worth clients revealed

High net worth will soon look very different

Survey: What high net worth clients want


Sources

Capital Group Advisor Generational Attitudes Study, September 2018

Capital Group Investor Generational Attitudes Study, August 2018

Capital Group Wisdom of Experience Survey, December 2017

McKinsey Money in Motion Survey, 2016
 

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