Advisers looking to attract younger clients
Although advising young people on money can be"tricky", more financial advisers are seeking to target millennials, with one in nine now actively pursuing the group, research by Aegon has indicated.
According to Aegon's Adviser Attitudes Report, one in nine (11%) advisers are looking to close the advice gap and target younger people so they better understand the benefits of investing early. In contrast, a third (33%) of advisers said they find targeting the young a challenge.
The provider surveyed 252 UK financial advisers and found three-quarters (74%) ranked people not tackling their long-term financial planning early enough as the biggest threat to financial security.
Although advisers are increasingly seeking out the young, at present more than three-quarters of advisers' clients (78%) are aged 45 and over.
According to Aegon, the current economic climate is making it increasingly difficult to target the young. Other research by the group revealed two-thirds of those aged 18 to 30 reported rising prices have left them with less money at the end of the month than they had six months ago, and they are also far more likely than other age brackets to be diverting money away from savings.
Additionally, more than half (52%) of those aged 18 to 30 have had to reduce their monthly savings to help with the increased cost of day-to-day living.
Investing In The Firm's Future
Clayden Associates director Dan Clayden agreed targeting the young was"tricky" but done right. he said. it could be a worthwhile investment in the future of an advice firm.
"The problem you have is that, for the advice to be cost-effective, if you are going to charge your normal rate for someone, then typically they have to have more money to invest and, typically, that will be at the mid to latter part of someone's life," he explained.
Clayden said his firm builds relationships with young people by adding value in ways such as organising their protection arrangements and helping them with their mortgages.
He continued:"We are able to start relationships with clients earlier on in their life then, later down, the road when they have maybe accumulated some wealth, the advice we offer will be more cost-effective."
Aegon pensions director Steven Cameron added:"By engaging with savers early in their financial journey, advisers can put them on the right track. Advice needs differ with life stage so it is important to offer relevant and timely insights and support, with technology offering new opportunities."
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