In Profile:

A Conversation With Craig Hawley

Gen-X: Moving The Needle

by P.E. Kelley

Mr. Kelley is managing editor for the magazine. Connect with him by email:

‘Being in their prime earning years and next in line for inheritance, Gen X is a vital segment for advisors to target in order to enhance profitability and set their firms up for future success.’ So said Craig Hawley, head of Jefferson National / Nationwide’s advisory solutions business, referencing conclusions from his company’s third annual ‘Advisor Authority Study.’

The seminal study attempts to explore ‘investing and advising issues’ facing RIAs, fee-based advisors, broker/dealers and investors, while better identifying the demographic profiles of today’s age-diverse client base. According to the report, 52% of Gen-X investors do not have an advisor. Moreover, despite their growing wealth and emerging investment challenges, they remain least likely to seek out professional advice.

To that end, the Advisor Authority Study presents a compelling and far reaching portrait of this generation, segmenting critical data by age, gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online in order to bring them in line with their actual proportions in the population.

We spoke with Mr. Hawley about the scope of the report, how it is being incorporated into the company’s culture and it’s implications for capturing a larger share of the Gen-X market.

PEK: As the next largest demographic segment to begin to acquire, and inherit wealth, what do you know about the investment attitudes of Gen-X?
CH:There are many experts who call Gen X the “lost generation,” because they’re caught in the middle of older Baby Boomers and younger Millennials – and are far outnumbered by both. But to your point, Gen X investors are well on their way to surpassing Boomers, and well ahead of Millennials, when it comes to earning power, creating wealth and inheriting wealth.

At the same time, Gen X investors have faced their share of financial challenges. Studies show they were hit hardest during the housing collapse of 2007, and again during the 2008 financial crisis. So when it comes to the issues that will impact their approach to investing and their portfolios, it’s no surprise that our latest Advisor Authority Special Report on Gen X Investors shows that they are most are likely to focus on hot-button issues that come straight from the headlines – like Washington politics, Fed policy, global instability and taxes.

We also learned that those Gen Xers who felt pressure to change their investing strategies last year were twice as likely to invest more conservatively rather than more aggressively. And even more likely to invest tactically versus buy and hold.

PEK: It’s been called the generation least likely to seek out an advisor’s help… Do you believe you’ve successfully penetrated?
CH: It’s still an untapped market. And the opportunity is huge. According to our latest Advisor Authority Special Report, over half of Gen X investors say they don’t have an advisor. In spite of their growing wealth and their complex financial challenges, Gen X investors are the least likely to seek professional advice. On the surface, it’s surprising.
But dig deeper, and studies show they are cautious, skeptical and even mistrustful of advisors and the financial industry overall. With this in mind, it’s important for advisors to build the trust that it takes to effectively target Gen X investors. This means understanding the characteristics that make Gen Xers unique, and focusing on their priorities, preferences and top concerns.

And it’s worth the effort. Gen X investors are in their prime earning years, next in line for inheritance in the “Great Wealth Transfer,” and have tremendous potential on so many different levels. There’s a reason why year-over-year, we’ve seen that all advisors, especially the most successful, say that Gen Xers will be their primary target to enhance profitability now – and to position their firm for future success.

PEK: RIAs and fee-based practitioners all say they’re targeting Gen-X investors. What resonates most with Gen-X?
CH: When choosing an advisor, it’s crystal clear what resonates best with Gen X investors year-over-year. They say that an advisor’s experience matters most, followed by personalized and holistic advice, and a fee-based fiduciary standard.
To help Gen X investors build more wealth, and control all the complexities that come with it, the challenge goes well beyond the basics of managing their portfolio. As asset management is becoming more commoditized, and competition for Gen X clients will only continue to increase, the real key to attracting and retaining this generation comes from leading with holistic planning, customized offerings, and putting their best interest first.

The most successful advisors understand that holistic planning for Gen X investors must be comprehensive and balanced between competing priorities – managing their portfolio and their taxes, managing their expenses and debt, considering the needs of their aging parents while also funding their children’s education. And ultimately you also want to help them build a foundation so they can leave a financial legacy.

Gen Xers are more cautious, more skeptical, and even mistrustful of advisors and the financial industry overal

To effectively customize offerings for Gen Xers, it’s clear that you need to build one-on-one relationships that are based on trust – because if you don’t know your Gen X clients at a very deep level, you can’t anticipate their needs. And putting Gen X clients first means making a real commitment to transparency in the fees that you charge, the products that you use and the breadth of choices that you offer them. The advisors who can re-engineer their practice in this way will resonate best with Gen X investors – and have the competitive edge when targeting them.

PEK: How does Gen-X differ from other generations, Boomers and Millennials in particular, about preparation and expectations for retirement?
CH: Ask Gen X investors why they have an advisor, and they will say saving enough for retirement is the number one reason – by a very wide margin. Compare that to older Boomers who say saving enough for retirement is a distant second, and younger Millennials who say it is an even more distant third.

Then ask Gen X investors their top financial concern, and they’ll say that saving enough for retirement is number one – and again, by a very wide margin. While Millennials also say saving for retirement is their top concern, it’s not nearly as urgent for them. As for Baby Boomers, they say concerns about protecting assets, cost of healthcare and taxes are all more important than saving for retirement.

Gen X investors are also far more concerned about financing children’s education and other large expenses when compared to Boomers. And they’re strapped by student loans – with six times more debt than their parents had at the same age. It’s no wonder they’re concerned about having a strategy to save more.

PEK: Describe the market-profile of Gen-X: What kind of influence do they have in the workplace? What about earning power and wealth generation?
CH: When it comes to the workplace, the market and the economy, Gen Xers have a tremendous impact. Studies show that they are surpassing both Baby Boomers and Millennials as the majority of business leaders, senior managers and decision makers at U.S. companies of all sizes. And as entrepreneurs, their numbers are growing, with some of the highest rates of launching startups and attracting more venture capital.

It’s also clear that Gen Xers are earning more, building more wealth and rising up the ranks of the High Net Worth, at the same time that Baby Boomers are retiring, spending down their assets and preparing to pass it along to their heirs. In fact, Gen Xers are likely to inherit more than $30 trillion in the “Great Wealth Transfer.” We’ve also seen how Gen Xers hold five times more wealth than Millennials today – and will continue to surpass them for decades.

PEK: What do advisors need to know about targeting Gen-X, and making a meaningful, resonant connection?
CH: We’ve already talked about the fact that Gen Xers are more cautious, more skeptical, and even mistrustful of advisors and the financial industry overall. So it makes sense that when it comes to building and maintaining a successful advisor/investor relationship, Gen X investors – more than any other generation – say that trust comes first.

To earn their trust you have to do your homework and look at the research that’s out there to learn what makes then unique, what is most important to them, and what keeps them up at night. More important, to make a meaningful, resonant connection and to create a successful customer experience for your Gen X clients, there has got to be quality communication. Gen X investors tell us that communication is the number one factor, and establishing a one-on-one relationship with them is a close second. And don’t forget the importance they place on value, transparency and more choice.

PEK: Describe the existence of new technology within the market-approach of younger generations, and how that ‘moves the needle’ for advisors looking to connect with them.
CH: It’s interesting. Advisors today really rely on technology to run their practice, and they see technology as a priority for reaching younger investors. Things like using more social media and increased use of mobile technology are among advisors’ top three strategies for attracting the next generation of clients.

While it’s important to invest in social and mobile, along with enhanced client portals, robust cyber security, and even the use of robo advisors, Gen X investors still say that technology is no replacement for guided advice. More than any other generation, Gen Xers say face-to-face meetings far outrank all other forms of communication, and they say regular, in-person meetings are the most effective way for advisors to learn more about their needs. So invest the time in really getting to know your Gen X clients, and you’ll be investing in the success of your practice. ◊

To learn more, financial professionals can download this latest Advisor Authority Special Report on “Moving the Needle: Targeting Generation X” by visiting:
For more insights on Generation X and other segments of investors, financial professionals can also download the latest Advisor Authority infographic at: