Now might be the perfect time to advise the younger generation

Financial advice is generally regarded as a service for those that have already built up their wealth and so it makes sense that the average client of an adviser is in their 50’s and is looking to retire in the foreseeable. Advising those who are coming towards the end of their career and have reached peak earnings is logical as retirement decisions can be complicated and advisers can certainly add value to these clients.

On the flip side, many younger people in their 20’s and 30’s do not feel that they have accumulated the necessary wealth for financial advice to be appropriate and worthwhile. This is understandable because when you have less savings, investment decisions don’t feel to bear as much weight as they do in one’s grey years. While this is rational, that’s not to say that seeking investment advice wouldn’t provide any added benefit, and here’s why.

We all know the saying that it’s about time in the market rather than timing the market. This adage stands true, the law of compounding allows us to recognise that the benefits of investing early are huge and this is not something to miss out on. Supporting younger clients in the financial planning process could allow them to reap returns on a greater order of magnitude because they have more time to stay invested, a sanguine thought given current uncertainties.

There are multiple reasons why this could be the best time to start engaging with younger clients.

 1.      Behaviours are changing, 12 weeks of lockdown quickly adjusted our spending habits

Lockdown has provided time for us to reflect on our pre-Covid spending, many will reduce their non-essential expenditure spend going forward. 

2.      The news is full of financial stories right now

Younger people are tech savy, they are up to date with current affairs, news coverage of financial markets will have got many thinking about investment and saving in recent months.

3.      Millennials are becoming educated about the reliance of their retirements on financial markets

Financial literacy is rising, more young people understand the importance of pension provision, largely thanks to minimum pension contribution legislation.

4.      Many young adults have moved back home with their parents

Those who have been able to continue working will have amassed a small savings pot and may be considering what to do with it.

5.      It’s quite likely that their parents are already taking financial advice

It’s more than likely that some of your clients will have had their children move in with them. This presents a great opportunity to open the door to advice for their children.

In summary, there is frequent talk in the industry about the difficulty of attaining younger clients. Now is a golden opportunity to utilise your pre-existing client base as a gateway to the younger generation. You should think about your service offering and how this could be moulded to capture younger clients. For example, you could categorise the whole family as an “umbrella” client offering with reduced rates for family members.