How to engage the unengaged: Millennials focus on the now more than the future
Where most baby boomers focused on building wealth and their business, young people think more about themselves, their lifestyle and focus on finding a purpose in their lives.
So how do you make millennials (26- to 40-year-olds) care about investing in their financial future? And equally, how do you make it profitable to help?
Recognise that the struggle is real
Young people have paid a heavy price for having to protect their elders during the Covid pandemic. The Financial Times reported that young adults between 18–34 and the self-employed “saw the largest proportional increases in financial vulnerability,” and, “those under 40 are more likely than older people to have lost work and income, tumbled into debt and arrears, drawn on their savings and been forced to duck out of pension contributions.”
And things could get a lot worse before they get better. Especially when you consider the generous government payments used to prop up the economy during the pandemic, which will have to be repaid in the coming years – probably through increased taxes.
Understand the reality of what millennials think about money
Research from VICE, in association with Owen James Events, provides helpful insight into the profile of millennials, and their view of money and the financial services industry. Findings suggest that:
- Almost 50% of millennials worry about their financial future
- 41% feel chronically stressed about money
- 63% rely on a one-off event to help them financially
- Many are moving from big major purchases to small purchases
- They don’t really want to spend money on material things; instead, they want experiences such as holidays, eating out, showing off to friends
- They are keen to experience the most they can from life
- They want to live in the moment
- They see the potential in financial products
- They are entrepreneurial and ambitious
- Many are financially curious.
This young audience presents a dilemma for the FS industry. The industry laments that millennials have no money, because more than 70% of UK household wealth is controlled by over 65s. And they are likely to be financially worse off than their parents because of things like:
- University debt
- Unaffordable housing
- Wage stagnation.
Focus on near-term goals first
Many millennials focus on being able to fund their own expenses.
They don’t want to have to rely on their parents to cover everyday costs of living. So, rather than having specific savings goals, such as marriage, starting a family or saving for retirement, first they need to be comfortable living within their budget.
This assertion aligns with the worrying fact that one-third of millennials aren’t saving towards their pension. According to research from Profile Pensions, many millennials feel uninformed about pensions. 53% said they “wished their employer would explain pensions and their benefits”.
The report also revealed that:
- 23% of millennials didn’t know if they were on target for retirement saving
- 37% think they are saving as much as they can, but worry it won’t be enough to retire comfortably on
- 16% don’t think they will ever have enough to afford to retire
- 28% said they lack confidence with money and financial matters.
Fix the disconnect and address the needs of millennials
There is a clear disconnect between millennials and the financial services industry that needs to be addressed. There is also an obvious need for more financial understanding, and research suggests many millennials would welcome the right information.
Start work now to build a millennial audience and profit into the future as their salary increases, and when they inherit their parents’ wealth.
It will take a different mindset to make sure you share the right stuff in a way that is engaging and informative, but with a little out-of-the-box thinking, there’s nothing stopping you.
Here are a few simple pointers to consider.
Don’t think demographic, think mindset
Reaching millennials requires an open dialogue. This should encompass shared values, authenticity, and relatability.
Recognise you’re starting on the back foot
The financial services industry is among the least trusted sectors. And although many advice firms are working to address the stuffy image, most people still view it as boring and complex so try and make communications simple, clear, and engaging.
Solve it: Holistic financial planning and budgeting for the short-term can improve financial wellbeing.
Older clients you have looked after for years will undoubtedly have grown-up children who fall into the millennial age bracket. Consider writing a concise guide and give it a title that will attract the millennial audience. Or if that’s too onerous start including targeted information in current mailings.
Make the guide a digital download and email it to clients who you know have children in the right age range. Try something like “Budget for the life you want” and include simple, educational information.
Add value: Think about what you would have wanted to know in your twenties. For example, a digestible breakdown explaining how compound interest works and how to stay on the right side of it by avoiding credit card debt is relatable, interesting, and ultimately useful.
Make sure you include your contact details and a list of other things you can help with that they may find useful, either in the immediate or short-term future, such as cashflow planning or options for pension saving.
Spread the message: Once you have the guide, don’t stop there. Think about all the places you could use it to attract this young audience such as social media platforms, discussion boards such as Reddit, advertising, and so on. Employer benefit schemes are a great source of potential clients too.
There are countless possibilities and, if you find it works, remember to update it regularly and let it keep working for you to drive a new younger audience your way.
Be patient: They may not be that profitable immediately (although more so if you are using an automated system) but, as reported by FT Adviser, with an estimated £5.5 trillion expected to pass through generations over the next 30 years, it’s only a matter of time before these cash poor millennials inherit their parents’ wealth.
Read more about how to win younger clients and get more useful tips on how to use tech to keep things personal and deliver a multigenerational offering.
How AdviceBridge can help
AdviceBridge has developed an automated digital solution specifically aimed at meeting advisers’ needs in engaging clients across the generations.
The illustrative interface creates greater touchpoints and helps increase familiarity and greater trust. Clients can access information 24/7 helping you to deliver timely advice in a way that appeals to millennials and their parents.
Find out more about our service and how we can help you by emailing firstname.lastname@example.org or call us on 020 3925 3850.