Millennials need support as cost of living soars, say advisers

by | May 19, 2022

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  • More than a third (36%) of advisers say their millennial clients want additional support in the months ahead.
  • However, despite the nation currently facing a cost-of-living crisis, 35% of advisers are concerned that millennial clients are not following the advice they have been given.
  • Main concerns felt by millennial clients include: their investment strategy (40%), and protecting their nest egg (42%).

More than a third (36%) of advisers say millennial clients (those aged between 24 and 38) are wanting additional support, most likely due to soaring living costs and their financial needs getting more complicated following the pandemic, according to Charles Stanley’s Book of Stories 3.0 whitepaper.

Financial complications that may have resulted from the pandemic include such things as managing a reduced or more complex income, or even being confronted with unexpected expenses. Gen X clients (those aged between 39 and 53) and baby boomers (those aged between 54 and 74) follow, with 31% of advisers saying they want additional help and (30%) respectively.

As inflation spikes, putting increasing pressure on household finances, nearly a third of advisers (32%) say their millennial clients are concerned about running out of money, while two in five (40%) say their clients are anxious about their investment strategy. Retirement is also a prominent concern, with 36% of advisers saying millennial clients are worried about funding social care, more so than any other generation.

Other concerns advisers found their millennial clients are worried about include being financially responsible (37%), while 42% say they want to protect their nest egg.

According to advisers, millennials are also the generation that is most likely to compare themselves to others in their age group (34%), compared to Gen Z’s (28%) or Gen X’s (32%). In a more digitally enabled world, it is little surprise that younger generations are more impressionable thanks to the rise of social media and an ‘always-on’ culture.

18-23 clients (Gen Z) 24-38 clients (Millennials) 39-53 clients (Gen X) 54-74 clients (Boomers) 75+ clients
They have a clear idea of what to do with their finances 24% 35% 41% 30% 15%
They want additional support 27% 36% 31% 30% 16%
They are concerned about running out of money 31% 32% 32% 36% 12%
They are not following the advice they have been given 29% 35% 28% 31% 13%

 

 

 

 

 

 

 

 

 

Yet, despite clients being increasingly concerned about their finances, more than a third (35%) of advisers revealed that millennial clients are not following the advice they have been given, raising concerns over their savings strategies and spending habits against the financial goals they have set out.

The millennial generation are most likely to experience classic ‘trigger points’ with significant financial impacts that may prompt them to seek advice, whether that be starting a family, marriage, experiencing the death of a loved one, undergoing career changes, or buying a property. Saving for retirement is also a topic starting to weigh front of mind.

A combination of factors, including low interest rates, rising inflation, soaring house prices, and stagnated wage growth, also make these ‘trigger moments’ much harder for millennials than previous generations.

Sean Osborne, Head of Sales at Charles Stanley, said: “The soaring cost of living and sharp spike in inflation means that many people, particularly the younger generation, will find themselves in a position where they are tightening their purse strings more than usual. With many unsure or concerned about their future finances, millennials are in need of clear financial planning that will help support them in their future years and achieve financial security. UK households are contending with the biggest financial squeeze in decades and the choice of ‘heating or eating’ is mounting exponentially.

 “The moments that matter to individuals can heavily impact clients’ financial wellbeing, and is something all advisers must be aware of when advising younger adults. Advisers looking to serve the next generation may wish to engage in spending more time holding scenario exercises for real life situations, like marriage, divorce and having a family. Advisers are pivotal in helping clients establish a clear savings strategy and understand how they can reach their financial goals, giving them confidence that they too can create a nest egg, even at a time where financial concerns are at a peak.”

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