We’ve got the Traditionalists, the Baby Boomers, Generation X, and the Millennials — four generations all in adulthood. And there’s a start-up generation ten years old called Generation Z that is yet to be defined. For the first time in history, five very different points of view are bumping up against each other with different preferences, different motivations, different aspirations, different values, and different reactions to change.
The challenge to affluent families and family business founders who are making multigenerational financial decisions today is how to sustain a family heritage across all these boundaries?
One place to start is to learn what separates each generation—how we think, what we need and want, why we choose this over that. Once we level the generational landscape, we can explore individual personalities and relationships and discover the common ground we share. Here are some factors that show each generation’s unique impact on multigenerational planning.
The Generations Defined*
Centennials or Gen Z: Born 1995 – 2010
Millennials or Gen Y: Born 1980 -1994
Generation X: Born 1965 – 1979
Baby Boomers: Born 1946 – 1964
Traditionalists: Born 1928 -1945
*McCrindle Research 2012 – View entire Generations Defined chart by McCrindle Research here.
Named the Silent Generation, because all they were asked to endure, they so seldom complained.
- 55 million Americans age 70+
- Values based on realism, stoicism, patience, perseverance, personal duty
- Cultural messages from the Great Depression, WWII, Cold War, communist menace, corporatization, suburbanization
- Concerns for retirement lifestyle, surviving spouse security, family harmony, charity
The WWII generation loves saving, abhors waste, expects sacrifice, and respects tradition and structure. However, because the male provider and female nurturer roles are so ingrained for this generation, many surviving female spouses are not sure how and when to work with a financial advisor. With the prosperity of five generations potentially at stake, continuity of advice and service becomes critical to this generation.
Called the Baby Boom Generation, because big happy families gave their postwar parents a way to put world war behind them.
- 75 million Americans age 50 to 70
- Cultural messages of childhood stability, 60’s rebellion, Viet Nam War, racial and gender unrest, television addiction, entrepreneurism
- Values based on idealism, individualism, resilience, empiricism, personal conviction
- Concerns for financial independence, confiscatory taxation, unearned inheritance, and effective use of their social capital
Contrary to their reputation as rebels and change agents, Boomers now appreciate the value of planning to gain control of financial independence. Their history of career changes, marital splits, and blended families makes planning complex, so they want advice and guidance. However, their history of self-assurance can make the decision-making process more difficult.
Labeled Generation X, because feeling left out made them turn inward and enjoy being hard to figure.
- 65 million Americans age 30 to 50
- Cultural memes of latchkey childhood, lowered expectations, Sesame Street, video arcades, AIDS, personal computers, Internet
- Values based on skepticism, pluralism, autonomy, competency, personal commitment
- Concerns for financial self-reliance, retirement funding, education expenses, lifestyle compromises
GenXers learned to exercise caution and seek predictability in financial planning. They are careful contingency planners with strong distrust of institutional thinking. Reliance on committed and trusted personal advisors is matched by a prove-it attitude and down-to-earth decision-making.
Tagged the Millennials, because of their ease in embracing 21st Century change without glancing back.
- 83 million Americans age 10 to 30
- Cultural messages that said everyone is special, anything is possible, and showing up is as good as winning versus the threats of unrelenting terrorism and permanent economic problems. The certainty they totally own is that technology can solve nearly everything.
- Values based on pragmatism, antiauthoritarianism, activism, collaboration, personal freedom
- Concerns about the decline of prosperity, the burden of debt, untrustworthy institutions, and failure to stay in front of change
In spite of witnessing incredible overnight success by young start-up heroes and entertainment superstars, Millennials diligently calculate and control their own financial progress. They trust research and ratings more than advice. They have reinvented human interaction from talking to emailing to texting to messaging to whatever is next.
Maybe one generation always finds itself at odds with the one ahead and nervous about the one behind. Old school multigenerational planning used to look at two generations—one making decisions while making it hard for the other to change anything.
In the past several decades, the concept of legacy has made affluent families pay more attention to the role all the generations have in the stewardship of family wealth. It’s time to clear the generational fog and begin collaborating to not only sustain the heritage but expand it generation by generation by embracing the differences.
Additional input from Terry White, IdeaTransfer.