The economic upheaval triggered by the global Covid-19 crisis has forced many UK adults to reconsider their financial plans and, according to exclusive data provided to FTAdviser by Quilter, the renewed demand for advice is expected to be largely driven by the younger generations.
An April survey of 1,000 adults conducted by the advice giant found 86 per cent of young adults had sought help and information about the financial impact of the pandemic.
Social media was the second most popular source, at 29 per cent, for 18 to 30-year-olds – bested only by the use of websites.
And while it dropped to the fourth most popular source for 30 to 45-year-olds, still nearly a quarter said they would turn to social media for help with their finances.
The data showed an overwhelming demand for advice in the youngest generation, with only 14 per cent of 18 to 30-year-olds reporting they were not looking for any extra help regarding their finances in light of the coronavirus pandemic.
In contrast, 51 per cent of respondents in the over 60s category said they were not looking for further financial information, tending to favour newspapers, advisers and websites if they did.
Scott Stevens, director of adviser recruitment and development at Quilter Financial Planning, said: “Young adults aged 18-30 and those with established careers and young families in the 30-45 age bracket are both deeply concerned about the financial impact of Covid-19.
“Many of them are looking for help and information, and they are turning to websites, and social media.
“Traditional sources of information like newspapers or the real-world social network of friends and family are still important, but they aren’t the first port of call for younger people.”
Generational separation
Mr Stevens said the data revealed a “clear generational separation” in relation to lead generation for advisers, who must “go digital” to take full advantage of the new wave of client demand.
He added: “Young people are indicating a desire to receive professional advice in the future, so for financial advice companies it is important that when they think about engaging the next generation of clients they are accessible and present online.
“Young professionals and families today are the investors and retirees of tomorrow. Advisers must adapt quickly to digital transformation, boost their social media presence and ensure the customer experience they offer is smooth and accessible for those that have grown up with information at their fingertips online.”
The impact of the global pandemic on the UK economy is clear, with the latest government figures showing 8.4m jobs have been furloughed since the crisis began and claims worth £6.8bn paid out under the chancellor’s Self-Employment Income Support Scheme.
Phil Bray, founder and director at The Yardstick Agency, said it was only natural the millions of workers furloughed or facing an uncertain future as a result of Covid-19 would look online for information that could help them understand the effect of the crisis on their finances.
Mr Bray said: “This research offers valuable insights for financial advisers and planners into the habits of different demographics.
“It clearly shows that social media should be core to the marketing strategy to advisers and planners who want to engage with younger generations. They need to go further, however.
"Younger people have different financial challenges than older clients, while they will usually have lower investable assets. That means not only does the promotion of an adviser’s services need to be different, but also so does the proposition.”
Beware of scams
But a new age of digital lead generation carries its own risk and an increased opportunity for fraudsters to potentially target consumers seeking financial guidance for the first time.
Social media is an attractive platform for financial scammers to target victims and last year the Financial Conduct Authority warned both investment and pension scams were on the rise online.
The lure of get-rich-quick investments supported by fake celebrity endorsements and professional-looking websites can leave victims thousands of pounds out of pocket, with younger people usually the target demographic.
Mr Bray added: “Consumers turning to social media, newspapers or websites need to be careful too. The prevalence of financial scams and online fraudsters means consumers must be on their guard.
“Scammers are increasingly sophisticated and, despite what government scientists might believe, professional – this creates a challenge for regulated advisers and planners too, who must demonstrate their legitimacy.
“This can be done in several ways, including links to websites, explaining how regulated advice works and how scams can be avoided. Of course, this task hasn’t been made easier with the changes made at the start of the year to the FCA Register.”
rachel.mortimer@ft.com
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