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11
Is Your Financial Planning Practice Ready for the Millennials?
They’re Ready for You
ROSE WATSON, JD, MSEL
Raised in different economic times, impacted by technology
and major shifts in society, millennials are entering adulthood
with far different experiences—and expectations—than
their parents. Fundamentally, though, they aren’t much
different from any other generation coming into financial
maturity. Millennials may not know as much as they should
about financial matters, but they’re ready to learn.
According to the
2013 Wells Fargo Millennial Survey
, only
8 percent of millennials aged 22–32 report working with
a financial advisor. Although their specific priorities may
differ, this underserved group needs help in many of the
same areas as your older clients: budgeting, saving for
retirement, asset protection, and tax planning, to name a
few. Millennials may not have much in terms of investable
assets at this point in their lives, but they’re driven to
success and ripe for financial guidance. And you’re in an
ideal position to help them become the next generation
of wealthy clients.
A Focus on Education
Millennials are just getting started financially. They have
an income stream, but they may not know what to do with
it. They’re likely to be strapped with debt from student
loans, car payments, and mortgages. They may not be
following the golden rule of “pay yourself first” or fully
appreciate the value of saving early. As you begin working
with younger clients, keep in mind that they may well
need a crash course in personal finance.
•
Start with the basics.
Does the client know the
difference between saving and investing? Does he
or she understand the value of putting a spending
plan in place? Look for budgeting solutions that are
financially liberating and easy to follow. Advice
for helping clients manage debt is available in
Commonwealth’s Financial Planning Playbook—find
it on COMMunity Link
®
at Financial Planning &
Research > Financial Planning > Playbook > Personal
Finance Center > Become a Pro > Getting Started >
A Guide to Debt Management.
•
Connect them with the right tools.
For many
millennials, checkbooks are a thing of the past;
money exists in a virtual world. Their planning tools
should reflect this environment. Mint.com offers a
series of financial applications that can help them
start budgeting, tracking their spending, and
visualizing where the money goes. You’ll find simple
budget worksheets that you can e-mail to clients on
COMMunity Link at Financial Planning & Research >
Client Worksheets > All Worksheets > General
Assessments > Budget.
•
Help them understand credit.
Talk about how
clients can build credit and use it to their advantage.
This generation grew up with plastic: debit cards,
credit cards, gas cards, retail store cards. Is the client
aware that he or she can request a free annual credit
report? Does he or she know how specific actions
affect credit? The Coach Your Clients section of the
Playbook’s Personal Finance Center includes helpful
resources for launching these discussions.
•
Emphasize retirement readiness.
According to
the
Wells Fargo Millennial Survey
, less than half of
millennials are currently saving for retirement. This
generation seeks to climb the corporate ladder quickly,
and they’re expected to have many job changes, as well
as a major career change, during their lives. The relatively
Every generation tends to look at the
next and think, “What are we going
to do with them?”
