Research by Mintel revealed that older UK Millennials (currently in their mid-20s to late 30s) are the biggest generation struggling with debt. Following the COVID-19 pandemic, there’s been a rise in money worries amongst them – with their average savings ranging from only £3,500 to £6,000. And with the current cost of living crisis, over a third of them in 12 markets say they’ve been looking for ways to cut costs, and 1 in 5 have even resorted to taking on a second job to try to save more money.
With this clear need for advice on money management for Millennials, a few questions arise: is the market adapting to cater to a younger audience’s financial advice needs? How can financial services firms support a younger clientele? And how would neglecting this younger market affect the future of our economy?
At Moreish Marketing, we firmly believe in our agency purpose of harnessing the power of communication to help people achieve more financial freedom and security. And by people, we do mean all people. So if you’re looking for new ways to engage a younger audience in 2024, we thought we’d share some insights about the financial advice gap – and how your brand can help fill it.
What we cover
The financial advice gap: why does it exist?
The most common triggers for seeking financial advice are when someone is taking out a mortgage to buy their first home, starting a family or approaching retirement.
For a younger generation, the first two triggers are no longer on top of the priority list, with less than 30% of Millennials buying a home before they’re 30. It’s important to understand that for many Millennials, money is just a means to several ends: be it travelling the world, starting their own business or making significant investments.
The last trigger (retirement) is still a few decades away for them. Plus, the 9-5 job structure isn’t as appealing to them as it was to older generations. Over 50% of Millennials have expressed an interest in entrepreneurship, and research shows that younger age groups have shown the fastest growth in the freelance market, which will soon be dominated by young professionals.
So if your potential younger clientele aren’t coming in contact with any of the traditional triggers, they’re probably unaware of the financial help they could benefit from, especially with many experiencing a shift in the job market structure.
The benefits of offering financial advice to a younger clientele
Looking at it from a business perspective, are there any long- or short-term benefits to focusing on a younger audience?
Yes and no.
Millennials aren’t always the most cash or asset-rich clients – they’re still at the start of their financial journey. So in the short term, there may not be any financial benefits to focusing on them, especially for smaller financial advice firms who are looking for profitable leads.
On the other hand, Millennials’ growth potential is massive. After all, they are the future of our economy, so building trust and a relationship with them now can be beneficial for your business in the long run. And keep in mind that the younger generations are the bigger advocates for brand loyalty compared to older generations.
More importantly, helping young professionals manage their finances delivers positive outcomes for those who possibly really need it. Helping them at the start of their financial journey is beneficial for them, for your business in the long run as well as the economy.
Who can help fill the financial advice gap?
Considering Millennials aren’t the most lucrative target audience, but they are in much need of financial advice, how can the market fill the advice gap? Or rather who can fill it?
- Government and public bodies: With schemes like Help to Buy, Lifetime ISA and the 95% mortgage scheme, the government is doing its bit to help young people grow their money.
- Financial advice firms and providers: Striking a good balance between older, more lucrative clientele and younger clientele could be beneficial for advice firms and providers in the short and long run.
- FinTechs: The first place Millennials will turn is online so fintechs are in a great position to support this generation with more convenient and relevant education, guidance and robo-advice in a way that’s accessible for young people.
- Private trade bodies: A good example is the IPTF (Income Protection Task Force). They help raise awareness about income protection insurance amongst young people. They’ve recently launched a financial blog website and an Instagram page called Ziggy’s Money Moves that helps young people take control of their money.
How do you engage young people with financial advice?
Here are a few things to keep in mind when talking to a younger audience about finance:
- Relevance: As we mentioned earlier, different Millennials often have different financial priorities to generations past. So talk to them about what’s relevant to their circumstances and lifestyle, not what’s traditionally been sold to people at their current stage of life. And we’d always recommend talking about finance in an accessible and human way without the jargon but it’s even more important here.
- Authenticity: Millennials can smell insincerity from a mile away. They don’t like being “sold” to, so building a relationship based on shared values and a foundation of trust will optimise their customer lifetime value.
- Accessibility: Most Millennials don’t think a financial adviser would even take them on as they’ve no money right now… all the more reason to get financial advice! Be accessible as a brand, and show them that you are there to help them, whatever stage of their financial journey they’re at
The way forward for the financial advice market
Usually, financial advice is targeted at people with significant assets – older clients close to retirement, who are looking to get the most out of their pensions and investments or those looking to buy a house.
But what about those at the start of their careers – young people who need and are looking for financial advice and guidance to help make decisions on their financial priorities, protect their income and make some financial plans that fit with their life goals? Ultimately, they make up our future generation, but they’re currently being overlooked for financial advice. Can we change that?
Have you seen any campaigns successfully engaging young people with advice and guidance that will help them plan for their financial future? Or is your company involved in something in this area we could learn from or support with? We’re always looking for ways to engage with financial services companies to achieve their goals, especially when they’re aligned with our agency purpose and values. Get in touch and we can chat mor