As one of the ‘millennial’ generation I’m all too aware of the financial challenges my peers and I face – the high cost of tuition, increasing house prices, and a competitive job market – all while planning ahead for the future and trying to enjoy new experiences in the here and now. With all the competing priorities for our money we might not look like perfect clients for advisors, but my latest blog post explains why it’s worth putting in the groundwork with us today to reap the benefits in the future.
We make up a lot of the population
Typically characterized as anyone born between 1980 and 2000, millennials are on track to become the biggest demographic in history. This definition currently covers around 9.5 million Canadians and represents just over a third of the workforce, but is expected to grow to almost three quarters in the next few decades. There are going to be a lot more of us in the future.
We hold higher amounts of cash
Whilst millennials might be seen as a materialistic generation with short term goals, we actually hold a lot of cash, typically in standard savings accounts. We’ve lived through one of the biggest financial crashes of the century and the slow and sometimes unpredictable years that followed, which makes us want to prepare for sudden or unexpected events. And this isn’t just me talking from personal experience or the experience of my friends – a recent study has shown that millennials hold higher amounts of cash than most people in their 60s and 70s.
Our financial literacy could definitely be improved
Millennials might be the highest educated demographic in history, but when it comes to affairs of the financial variety, we’re pretty clueless. And this is a proven fact with a study by PwC showing that only 24% of millennials had basic knowledge of financial products. This lack of smarts on our part means that we could really benefit from the expertise an advisor has to offer.
We’re conservative when it comes to investing
This ties in to my previous point. I’ll be the first to admit that when it comes to investing money in anything other than my current savings accounts, I’m not really that knowledgeable, but what I do have saved I’m keen to protect. I already participate in my employer’s RRSP plan, but would like to be able to see my savings work harder. At some point on the horizon I’ll have to stop prioritizing vacations and start to consider buying a home. We’ve got the cash ready, we just need a little help with where to put it in a way that doesn’t entirely go against our risk averse nature.
We have competing priorities for our money
I’ve already touched on a few of these points, but as a generation we have a vast array of competing priorities for our money – from saving a down payment for a house, tuition costs and paying off existing debt to our love of travel and vacations. With these in mind we can become a little too preoccupied with the here and now and spare little thought to the future, especially retirement. This is where we could really do with the help of advisors.
I’ve touched on just a few of the reasons why advisors should be reaching out to millennials like myself. If you wanted to find out more, why not take a look at our complimentary eBook ‘Reaching the Millennial Investor: A Guide for Financial Advisors’.