Millennials have unprecedented access to information. They live in an online world, where information is just an internet search away. At the touch of a fingertip they can get global views, not just from experts in their own country, but from those living and working anywhere in the world. How important is this group to the financial advice sector?
Millennials are those born between 1980 and 2000, and are now aged 17 to 37. Some are just finishing their A-Levels, while others will have been working for up to 20 years. There are more than 16m millennials in the UK and by 2025 – that is only eight years from now – it is estimated that 75 per cent of the workforce will be millennials.
There is one other dimension to take into consideration for the millennial generation. A BBC news report in April this year noted that in the UK a higher percentage of university graduates (57 per cent) are female and therefore more highly educated, yet there is still a clear disparity in salaries between men and women with a woman earning £83 for every £100 that a man earns. It was also highlighted that only 35 per cent of the workforce are women.
However, recent research from the Resolution Foundation shows Britons no longer think young people will have a better life than previous generations and roughly half (48 per cent) of those surveyed believe millennials will have a worse life than their parents.
One reason for that is that this access to information means millennials are engaged with the impacts of their actions on a global scale and feel a sense of social responsibility. This has led millennials to study different subjects at university – there has been a shift away from science and technology engineering and mathematics (Stem) and business majors.
With this shift in industry focus, comes a shift in salary profile. The starting median salary of a business major (£23,000) is about 11 per cent greater than that of individuals that took a major allied to medicine (£20,500), yet the number of business and STEM majors decreased to below 20 per cent for the first time in a generation, according to The Council of Economic Advisers.
A good career for this generation is no longer just about money, their passion and values are crucial in making decisions.
However, because they are coming of age at a tough economic time and are choosing somewhat less profitable careers, they are putting off commitments such as marriage and home buying.
How does an adviser access this generation?
The use of technology is key as providing access to information is paramount to engage the millennial generation. Firms that are able to use social media or that have modern websites are likely to attract these clients. However, it is important to recognise that this generation is heavily influenced by family and friends when it comes to making purchases.
As most financial advisers admit their typical client is about the same age as themselves – financial advisers are on average about 50 years old – it should be no surprise that most millennials will be the children of your existing clients.
Advisers could also consider recruiting a millennial into their business and give them a mandate to build a marketing strategy to attract their peer group. This could mean building a new website or setting up a blog or twitter account to reach out to this audience.
However, firms looking to bring in millennials need to remember this cohort is seeking job satisfaction and an opportunity to help others. So firms should focus on why the financial advice sector is a great industry to be working in and how your role helps protect families from financial uncertainty and provides guidance to those seeking a secure retirement.
Darren Smith is head of the Financial Adviser School
