Marketing Corner – March 6th, 2015
Don’t Overlook Millennials
While they typically have no immediate retirement or financial planning needs—compared to say a pre-retiree—Millennials represent a significant emerging market for financial advisors and life insurance agents. Accessing this generation can be particularly difficult for a number of reasons and advisors are likely to focus on pre-retirees and boomers, taking in millennial clients as they come.
Here are some sensible and practical reasons advisors don’t pursue Millennials:
They Have No Money
The average Millennial enters a choppy marketplace wearing the cement shoes of student debt. According PNC Financial the average Millennial is burdened with $45,000 in debt, most often in the form student financial obligations.
They Have No Jobs
Last year, Millennials represented 40% of unemployed workers, slightly greater than Generation X and nearly double than Baby Boomers.
They Have Different Values and Priorities Than The Last Generation
Their values and priorities are very different compared to their parents or grandparent’s generation. This can be a reflection of the marketplace they entered—it’s hard to prioritize owning a home and establishing a retirement plan when the job market is squeezed tight.
For most financial advisors this gives the impression that this generation is not worth the effort. How do you begin the financial planning process for someone that has significant debt exposure, unstable income, and differing values? Why would you want to?
The reality is that there is good opportunity with this generation. Millennials will comprise a large portion of the workforce in the next ten to fifteen years. As the economy and job market improves, this generation will move into more stable positions and be primed for financial planning.
So why not wait until this generation is ready? Well, time for one. A significant portion of Millennials essentially had a half-decade or more of early earning power scrubbed from them—a period that could have been used to effectively manage student debt loads. So even when this generation becomes stable they will still be carrying heavy financial burdens. They will have lost time and earning power.
Here’s why you should look at this market, now:
They still need you
Although Millennials don’t have an immediate need for financial services, they still have a strong planning need (whether the kids appreciate it or not). More importantly, now is the best time for them to begin to plot their financial future
They Are Positioned To Get The Most Out of Financial Plan
Because Millennials are roughly thirty or so years away from traditional retirement age, they are in the best position to save for retirement, from a timeframe standpoint.
Becoming a trusted advisor for a young, upstart professional, can lead to repeat business as that client matures through their income life cycle. Solidifying a relationship early on will make you the go to resource for a Millennial client as they marry, have a child, or experience other life events.
Although Millennials can be a complex mess of financial concerns, their problem is a very simple and familiar one when it comes to retirement and financial planning: how to save when in debt. Or how to save with limited income. Essentially it’s the old savers vs. spenders model.
It may be difficult to allocate toward a retirement program when every dollar is pretty much spoken for, but Millennials, as with anybody starting a financial plan, can grasp the importance of saving. So how do you access this market? The same way you access any new client needing a financial plan.
Explain to a Millennial Prospect:
Pay Yourself First – Saving is just simply paying yourself first. It is as necessary as paying loans, credit cards, and utilities.
Manage Your Debt Appropriately – Although it is important to squash large debts as quickly as possible, it is important to establish a plan for when that debt is cleared, especially when time is a great compounding factor.
Be Consistent Even During Financial Instability – Regular contributions to savings accounts and retirement programs are what help consumers accumulate, even with a debt load.
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