Know: A majority of Americans has lost faith in traditional social and corporate safety nets. The good news is that younger Americans aren’t looking to the government for solutions but are willing to create their own personal safety nets.

Do: Savvy financial advisors recognize that, despite the many years they have to plan for retirement, Gen Xers and Millennials are risk averse right now. Instead of telling them how much money you can make them, tell them how you can help them build their own “personal safety net.”

Financially stressed out Americans are rethinking what they want out of life, MetLife has found in its 2009 MetLife Study of the American Dream. They are less concerned about accumulating material possessions and more focused on the quality of personal relationships – family, friends and marriage.
The economic crisis has been a “loud wake-up call” for [...]

Know: Americans are responding to the financial crisis by redefining “the American dream.” According to a new MetLife study, it’s less about accumulating material possessions and more about achieving financial security and spending time with family and friends. Gen Xers are more likely than members of other generations to re-evaluate priorities.

Do: Knowing that Gen Xers are more likely to be rethinking their life priorities, trusted advisors know this is a particularly good time to approach clients in the 26- to 44-year-old bracket about updating their financial plans. Advisors also know to appeal to the Gen Xers’ pragmatic and independent streaks.

For financial advisors, the most important fault lines in American society don’t fall along racial, religious or gender divides – they’re generational. The four main generations – the Silent Generation, Baby Boomers, Generation X and the Millennials – differ from each other in profound ways in their attitudes towards spending, saving and investing.

The most profound indicator of a person’s view of the world and his or her finances isn’t race, religion, education or income. It’s generational.

The 35 million members of the Silent Generation were born between 1926 and 1945, sharing the sacrifice of total war during World War II and absorbing the virtues of patriotism, self sacrifice and respect for authority. The Silents are more likely than others to save, invest and live within their means. Trusted advisors appeal to their thrift, self discipline and fear of uncertainty.

Seventy-six million Baby Boomers were born between 1946 and 1964, an age of prosperity and boundless potential that made them optimists by nature. Boomers have a powerful work ethic, yet their sense of entitlement to the good life made them big borrowers and poor savers. Trusted advisors appeal to their strong desire to control their own destiny.

The 62 million members of Generation X, born between 1965 and 1982, grew up during a period of social and economic disruption. Suffering the fallout from soaring divorce rates and the “restructuring” of their parents’ jobs, they became self-reliant and skeptical. Financial advisors should appeal to their desire for independence and autonomy.

Know: Born between 1983 and 2002, 80 million Millennials (also known as Generation Y), are the product of the Internet era. Their social interactions have been shaped by technology — cell phones, texting, Facebook — making them the most connected of all generations.

Do: Trusted advisors understand that the technologically enabled Millennials move in swarms. Appeals to conformity – everyone else is doing it – have a better shot with this group than with the Boomers or Gen Xers.

Key words used by financial advisors resonate very differently with clients, depending upon their generation and life experience.

Trusted advisors understand that words like “recession,” “retirement,” “control” and “security” inspire a wide range of emotional reactions across the generational spectrum.