Reconsidering Generation X

Here’s why these former slackers make great clients—and what products work.

By Shane Miller

Remember the Generation X stereotype? They were long-haired, flannel-wearing slackers, too concerned with the relationship between existentialism and the Slurpee to save money for the future. Well, surprise! Those greasy-haired grungers have grown up, gotten haircuts and somehow managed to collect some serious dough along the way. Here are some reasons why you should be targeting Generation X clients now along with some of the products and services they may be interested in.

• Most professional Xers have four-year college degrees at minimum. Many were fortunate enough to have all or most of their education provided by their parents. Those who didn’t, started out their professional life in debt, saddled with student loans to repay over five to 10 years. Most want their children to avoid that burden and they have a strong desire to provide a level of education at least equal to their own. Product: 529 plans
  
  
• Generation Xers bought their first house earlier than their parents did, and began having children later than their parents did. Because of this, they are more likely to have greater discretionary income when their children are younger and more concerned about leaving those children in the lurch should the worst happen. Product: Life insurance
  
  
• Contrary to the national average, Generation Xers are quite serious savers. They have seen their parents working beyond the retirement age they envisioned, or living a retirement lifestyle that is less than they anticipated. As a result, most people in this age bracket participate in employer-sponsored retirement plans, many at the maximum level. Product: Retirement planning/401(k)
  
  
• Many Generation Xers started investing at a very early age. They recognize the perils of the Social Security systems and are taking control of their own destiny at a much earlier age than the Baby Boomers did. Product: Long-term care insurance
  
  
• Generation Xers are already familiar with mutual funds and may have participated in the boom/bust stock market of the 1990s. They expect instant access to account value information via the Internet. They are starting to understand what paying taxes is really about due to higher incomes and larger 1099 distributions from investments they own. Thus, tax-deferral is an attractive feature. Product: Variable life insurance

These tips were taken from the article “Selling Variable Life to Generation X,” which originally appeared in the November 2000 issue of Advisor Today.