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Generational Bias Can Cripple Client Relationships

February 25, 2016

Financial advisors are rarely just money managers. They play a critical role in the lives of their clients through many life changes. 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.

Today, there’s five different generations that advisors could work with, and each carries its own set of tendencies.

Age is just a starting place. From Traditionalists to “Generation Edge,” advisors must understand the formative story behind individual 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 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.

For instance, 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 about 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 who might be your parents’ age, or working with a fellow advisor.

Knowing the distinct generational personalities can help advisors build stronger relationships, better connect with any generation, position themselves to retain assets when beneficiaries inherit, and continue to grow their business.

Partnering with consulting and research firm BridgeWorks, Ivy Funds has created an educational program called GenLink to help advisors understand and serve the different generations.