I recently completed a master’s degree in financial planning with the University of Gloucestershire and I wanted to understand what financial goals young adults set themselves and why they do not seek advice from an expert to help meet their goals.
The methodology was interviewing adults aged between 18 and 40; the sample was quite minimal and may not be generalisable across the wider ‘young adult’ demographic. But the aim was to provide a better understanding of the perception young adults have of the financial services industry, goals they typically set and whether they seek advice from a financial expert (based on the individuals that were interviewed).
The perception of the financial services industry was investigated amongst the interviewees, with more than half of them feeling that they are not suitable individuals to receive financial advice from an expert. Many of them perceived that financial advice was for the ‘wealthy, older generation’. When questioned further as to who they believe financial advice was for, they acknowledged it was for everyone.
Therefore, the perception of the financial services industry versus what they actually believe to be true with regard to who can benefit from financial advice is completely different.
It is clear from the research undertaken that young adults do set themselves financial goals, with the most common ‘milestone goal’ being a house purchase. Other goals were also identified, but related to more imminent requirements, such as saving for a holiday or a car.
What was acknowledged during the research was that although goals were identified, more than half of the interviewees did not have a plan in place to reach their goals specifically.
With some goals being identified, it was still not clear why young adults do not seek advice from an expert, so that there is help and support with implementing a plan to help reach the goals set. This is especially true if they believe financial advice should be for everyone, despite their perceptions being contrary to belief.
During the interview process, it was highlighted that there is a lot of information available online and on social media, which the interviewees felt comfortable accessing and then making financial decisions based on what they have seen and/or read – with Martin Lewis being highlighted as particularly useful in terms of information he provides via his website and emails.
But some of the interviewees also acknowledged the information accessed is relatively generic and they struggled to understand or apply what was found to their own circumstances and, as such, would value a further conversation with an expert to cement understanding.
From the research undertaken it was clear we are now living in a world where there is a growing online presence from individuals on YouTube or TikTok providing financial information; advice on financial matters that individuals do adhere to, but it is not clear how reliable and valid this information is.
Given the degree of regulation that apply to financial services, which have increased over the years, should online information be subject to regulation? It certainly brings into question who is considered an expert and what makes them trustworthy.
Regardless of the information that can be sourced through various online outlets, one of the key questions asked was: ‘Would you know where and how to access financial advice?’. The vast majority of the interviewees agreed they would not know where to go.
All of the interviewees agreed it was important to plan for your future financially and acknowledged the positive involvement an expert could have in supporting with goal setting and planning. But the biggest stumbling block is accessibility to such experts.
To summarise, it is not that young adults do not feel the need to involve an expert regarding their financial goals, the main issue for them is knowing where to go to obtain the advice and support they need.
It is clear there are various steps that need to be taken across the financial services industry to make advice accessible to everyone. Wealth management companies and financial services institutions have the opportunity to provide a greater imprint in the financial services industry and provide accessible information to everybody, as well as providing access to financial advisers throughout the UK.
A greater online presence within the financial services industry, particularly across social media, is required where companies provide up-to-date, correct and relevant information that individuals can access, secure in the knowledge that it is from a reputable, reliable and trustworthy expert source.
Furthermore, for content that is created online, to involve the younger generation – make it more relatable to all ages and, as such, start changing the perception of financial services from wealthy, elderly individuals to everyone.
My research project has made me evaluate the approaches taken with new and existing clients. There is certainly plenty of work that can be done to improve communications and access to advice/guidance when it is required.
Regular communications to existing clients are being reviewed, with more useful content made available for the younger generation. Furthermore, it is important to embrace the evolving world of social media and increase online content that individuals can access more easily.
There is so much incorrect information available from unregulated or unqualified sources, so it is important to build a reliable, online presence that people can access easily, as well as provide the opportunity to seek further clarification from an expert if they need to talk about their own personal circumstances.
Financial advice is for everyone and this message needs to be made much more clearly.
Kelly Mills is a chartered financial planner at Peter Harding Wealth Management
