Why advisors need to understand each generation


Financial advisors play a critical role in clients’ lives, serving not only as money managers but often also as life coaches. Advisors are with clients through marriage, child-raising, home-buying, new jobs and job transition, caring for aging parents, the loss of loved ones and other major life events. The relationship between advisor and client is a personal one and, as such, it’s vital to understand the person on the other side of the table.

Finding common ground is key, but it isn’t automatic. Good advisors are adept at building connections across different personality styles. When challenges arise, it can be easy to write them off to generational differences. People with differing life experiences and formative influences tend to see things through their distinct lens.

In fact, research has taught us there is a generational bias that brings some identifiable personality patterns to each generation. There are five generations that advisors may work with today, with each carrying its set of tendencies.

Age is just a starting place

From Traditionalists to Generation Z, advisors must understand the formative stories behind the generations in order to serve each effectively. Doing so can lead to a growing and stable practice.

To truly understand a generation, you have to study the events and conditions experienced during their formative years — roughly the teenage years — when individuals are highly impressionable and coming to terms with the world. During these years, pop culture and world events influence the way an individual perceives the world, leading to certain personality traits or general beliefs. Understanding the traits for each generation can help us bridge any divide and avoid potential conflict.

By using generational theory, advisors can use each generation’s perceptions and beliefs to strengthen relationships, which ultimately will help move their practices forward.

It’s not rocket science…is it?

Let’s look at an example. If you were to ask a Baby Boomer what he thinks about NASA, the discussion would probably turn to the moon landing and how proud he was that the U.S. was able to beat the Soviet Union in the “space race.” After man landed on the moon, Baby Boomers felt anything was attainable if you worked hard enough.

If you were to ask a Gen Xer what she thinks about NASA, she would probably first mention watching the Challenger space shuttle explosion and talk how she felt shocked and disappointed in NASA. After Challenger, Generation X started to question NASA’s capabilities.

Two different generations — two different perspectives. You’ll find similar examples across a range of topics, from pop culture, to music, politics, religion and, yes, money.

Navigating generational differences can be tricky, whether you’re speaking to a younger client (or prospect), chatting with a long-time client that might be your parents’ age, or working with a fellow advisor. Knowing the distinct generational personalities can help you build stronger relationships with every generation, be in a position to retain assets when beneficiaries inherit and continue to grow your business.

GenLink program information is prepared in coordination with an unrelated independent third party, BridgeWorks, and is provided for informational purposes only, and does not represent an offer to buy or sell any investment product. Ivy Distributors, Inc., believes the sources to be reliable but does not guarantee the accuracy of the information.