How to overcome the challenges of engaging the next generation – Part 3: Dispelling 3 millennial myths
In this final part of the three-part series on how to overcome the challenges of engaging the next generation, find out some of the money myths that have been unfairly attached to millennials.
Among other criticisms, millennials (born between 1981 and 1996 and aged 26 to 41) are often thought to be self-obsessed, entitled, lazy, and bad with money. But actually, millennials are far more savvy than you might think.
Myth 1: Millennials don’t prioritise long-term saving
While it’s true that home ownership among millennials is at an all-time low, don’t assume that this is because they are bad at saving.
Even before the pandemic, this young generation were faced with stagnating wages, and increasing rent and student debt. The high cost of living was a problem before current times made things even worse and, for many, staying afloat will have been their primary concern.
However, this doesn’t mean they aren’t focused on long-term saving.
Millennials haven’t necessarily got an easy time of it when it comes to employment. They often work more flexibly and many have experienced multiple short-term employments, zero-hours contracts and “gig economy” work.
In fact, considering these very real obstacles, millennials are doing pretty well.
According to HMRC, millennials in the UK are serious about saving: 34% of under-35s contribute to personal pensions – the highest number since records began in 2001 (compared to 24% of 35 to 44-year-olds and 26% of 45 to 54-year-olds).
Meanwhile, 37% think they are saving as much as they can but worry it won’t be enough to retire comfortably on.
Research carried out by Profile Pensions found that many millennials “feel uninformed about pensions”.
The study also revealed that 40% find pension rules very confusing and more than half (53%) said they wished their employer would explain pensions and their benefits to them.
This is your opportunity. Attract this young audience today and bet on the long-term value of gaining their trust by providing valuable information.
Produce a brief, downloadable guide with information that their employers are failing to provide. Alternatively, take to Twitter and tweet 10 things you need to know about your workplace pension.
While you’re at it, don’t forget to upsell and explain other tax-efficient ways they can save for their future goals and aspirations.
Lifetime ISAs are an ideal sell as the limited time available to start one should naturally help drive incentive to act sooner rather than later.
Myth 2: Millennials don’t plan for the future
In 2019, LoveMoney reported that millennials were optimistic about the future.
At that time, 76% of young people aged 16 to 25 believed they would have a better financial future than their parents, according to a Young Adult Financial Literacy Study by Charles Scwab.
Even then, there was a stark mismatch between ideals and realities. 43% of this age group had to borrow money from their parents to buy necessities, and 30% had skipped a meal to cut costs.
Having come of age during a recession and then being dealt another potentially long-lasting financial blow by the coronavirus pandemic, millennials might be forgiven for avoiding thinking about their long-term plans.
However, according to the 2022 Investopedia Financial Literacy Survey, while life experiences, debt burdens, and frequent money decisions have left many millennials quite stressed, they are also confident and invested (literally) in their financial future.
They are also forward-thinking, with many juggling their financial future with the present. Their top three financial worries are:
- Knowing how much to save and finding enough money for savings
- Debt management
Despite what you may believe, investors in this generation are engaged: 39% seek out investing advice weekly, with many relying on internet research and YouTube to learn.
Again, put yourself where they are and provide targeted advice around savings and retirement planning. Guide them towards creating a financial plan that will grow and change alongside their evolving life plans.
While they may not be immediately profitable, by sharing your time and expertise now they will likely stick with you through the years when they are progressing their career (and so their earning power) and building a solid future for themselves and their families.
Myth 3: Millennials are digital natives
Although it’s easy to think that all millennials were born with their phones practically glued to their palms, not all millennials were born into the connected world of technology.
While many younger millennials might have graduated directly to a smartphone, older millennials were initially stuck with Nokia handsets and battling frustrations of dial-up modems to get online.
That said, they were ripe for the digital transformation that has taken place since Steve Jobs launched the first iPhone. This means that they will happily look for, and expect to find, technology solutions to their problems.
Be ready to solve their problems and give them control over their finances with technology.
The AdviceBridge platform helps deliver personalised financial advice to clients of every age in an efficient and cost-effective way. This is particularly useful when it comes to less profitable and harder to service clients, such as millennials.
The white-label app gathers personal and financial information direct from the client and digitises many of the manual, time-consuming processes, which allows you to focus on the relationship instead of admin, research or reports.
It also calculates the income your client will receive on a monthly basis in retirement, alongside a “safe to spend” figure of what they can spend on a monthly basis currently, while showing the best way to invest across different tax wrappers.
The app enables you to communicate and engage with clients from all walks of life, no matter where they are, specifically those who traditionally prove unprofitable due to the accumulating phase of their financial planning journey.
Get in touch
Find out how AdviceBridge can benefit your business and help you attract millennial clients profitably by emailing firstname.lastname@example.org or calling us on 020 3925 3850.