Gen Xers – the original latchkeykids – came of age defined by neglect. They've concluded they canrely only on themselves. (Photo: Shutterstock)

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Remember the first time you traveled to a foreign country? Yougot there and discovered, no matter what you thought, you justdidn't know the language. You knew a few important phrases, but,when it came to idioms, you were completely lost.

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In case you don't remember middle school English class, an idiomis a phrase that means something beyond the literal meaning of thewords within it. For example, “get on the ball” does not mean toliterally find a ball and get on it. It means to align your effortswith the current goal.

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This miscommunication makes sense. After all, it merelyrepresents the difference in culture and upbringing.

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After speaking with an expert in generational studies, I'mconvinced you don't have to cross the national boundary toexperience this inability to adequately communicate (see “Exclusive Interview: Chuck Underwood Explains Whythe Generations View Money Differently,” FiduciaryNews.com,October 16, 2018).

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The concept of a generational divide is not new. The “GenerationGap” became a popular term in the 1960s as a way for Baby Boomersto express the differences they had with their parents' generation.At that time, it was as though the two generations lived ondifferent planets. The older, raised in the scarcity of the GreatDepression and in the national unity of the Second World War,possessed vastly different values from the sex, drugs, androck-n-roll that defined the life of the younger generation.

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Indeed, one of the most watched TV shows of all time – “All inthe Family” – featured this generational schism as the basis of itsplot line.

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The field of generational studies barely existed when ArchieBunker butted heads with Meathead Mike Stivic. Within a couple ofdecades, however, academic research on the study produced profoundinsights. Today it's almost become a cottage industry.(Incidentally, Underwood notes this with lament as he's concernedthere may be false prophets practicing in the field due to itspopularity.)

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With regard to financial professionals, only the three mostrecent generation pose growth opportunities – the baby boomers(born between 1946 and 1964); Generation X (born between1965-1981); and the millennials (born after 1982 through maybe2000).

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Note, officially, there is no “Generation Z.” Underwood says itsalmost impossible to determine when a new generation begins untilthey've reached their mid-20s. That means it won't be until another7-8 years before we can truly identify a “Generation Z” (orwhatever we decide to call it).

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Research shows there are clear, distinct, and significantdifferences between the generations. Why? Because generations aredefined by “what's happening” in their world just as they leave thecocoon of the educational system.

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That's when they adopt the values that stay with them for theremainder of their lives. Granted, it may take a few years forthose values to percolate before that generation becomesself-aware, but the seeds are set as early as high school and aslate as college.

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At this point, the baby boomers and Gen Xers are set intheir ways. The millennials are still gelling, but they're almostthere. Research in the field offers confirmation on many of theworries the financial industry has in terms of servicing Gen Xersin particular (but probably not millennials).

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Gen Xers – the original latchkey kids – came of age defined byneglect. Not only did their parents let them come home to emptyhouses, but every night on the news they saw scandals plaguingleaders in government, religion, business, and sports. Divorce andlayoffs took their toll.

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Gen Xers concluded they could only rely on themselves.

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Self-reliance is a good thing. However, when you couple it withdistrust and cynicism, there may be unintended consequences. GenXers aren't joiners. They don't trust institutions – anyinstitutions. This might explain everything from the decline inchurch attendance to the dearth of new members in many civicorganizations and trade associations. Gen Xers became the first“job-hopping” generation.

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With Gen Xers just now verging into “empty-nesthood,” theyremain the primary “parent” generation. Usually, this would beconsidered a sweet spot for financial professionals.

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Yet, we see more interest in the millennial generation, despitethe fact millennials, on a per capita basis and based solely ontheir age in life, likely have less assets and less needs than GenXers. Why would this be so?

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Underwood says Gen Xers have “a pretty big chip on theirshoulders against boomers.” Since baby boomers remain in control ofmany financial service firms, they no doubt detect this antagonism.Millennials, on the other hand, “generally love older people”according to Underwood.

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Now, if you're a baby boomer in charge of business development,would you target a market that is naturally opposed to you (GenXers) or one that is naturally attracted to you (millennials)?

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You can further add to this equation the fact that the marketnaturally attracted to you is also the largest generational cohortever.

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This gives a whole new meaning to “generation-skippingtrust.”

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).