When it comes to investment planning, there is a large generational gap between the older folks who still form the bulk of the advisor-client bases, and their children. The parents, having been born in the Depression, or at least the recent memory of it, too often view their kids as spendthrift, credit junkies who can not be trusted to handle their finances.
Your role as a financial advisor is to bridge this generational gap in expectations.
The Silent Generation (1925- 1945)
The oldest living generation is known as the silent generation. These are the clients you will soon lose. How they think about money is, as with any generation, colored by their experience. These clients were born into the Depression and World War II and sandwiched between the GI Generation and the Baby Boom, this generation evolved from being loyal to parents to embracing the youth revolution. They are also known as “the lucky few” because they were relatively small and made the biggest generational leaps in education, affluence and life expectancy in history.
This generation learned the value of thrift and forbearance at an early age. As a result, they avoid credit like a plague, and one of the biggest financial concerns is that their “pampered” kids don’t understand the value of a dollar.
Here's a breakdown of the different assumptions of the "Silent Generation" when it comes to money that you will come across in your practice.
This generation is, of course, most concerned with legacy planning, but this is under a backdrop of many other concerns, such as:
- Higher health care costs, which affect this generation most keenly, along with the difficult planning for long-term elder care;
- The possibility of higher taxes, which disproportionately affect the wealthy;
- Longer life expectancies. They are the generation that has encountered first hand the reality that the old model of retirement saving was insufficient to the greatly expanding life expectancies – and far more active retirements – of today’s financial world.
As a result, their legacy concerns can be very emotional, mixed with worry for themselves and their children and grandchildren (some of whom may be nearing retirement themselves). They may, as their name implies, not want to talk about legacy planning, which is a challenge and an opportunity for advisors.
In terms of communication style, they are more interested in personal contact, especially face-to-face, shaking hands and looking into your eyes than other generations, and far less interested in technological-driven interactions like facebook and websites. They maintain a more serious approach to investing than other generations, and expect the topic to be treated seriously, even formally.
Just as important is the use of words. Advisors should be careful in what words they use, because to this generation words have meaning.
Keep a look out for upcoming blogs on 3 other key generations!
Read: The Words That Work for Advisors & Life Insurance Agents