As the founder of the Young Money blog, I can honestly say I feel proud to work in the financial field. Most of us don’t intend to come into this sector (I trained as a musician, for Pete’s sake!) but I am pretty sure that what keeps us here is a genuine desire to help people.
There is, however, something that makes me feel less proud, and that is the financial industry’s well-documented problems with diversity. And that’s not just reflected in the make-up of the industry, still mostly belonging to one demographic (we all know which one).
It’s also reflected in the financial sector's offering to the public. Products and services largely cater to well-established interest groups, such as high-net-worth individuals and those in the know. Meanwhile, those who suffer from a poverty of opportunity, education and experience don’t get much of a look-in.
When it comes to young consumers, the financial sector has a particularly inglorious track record of either exploiting or neglecting us. It has got away with this because these so-called “millennials” are often poorly financially educated and largely disengaged when it comes to money.
Another problem is young people today do not reliably encounter the same milestones at predictable ages as the baby-boomers largely did. If we’re not all getting married, having children or getting on the housing ladder, what are the new catalysts for seeking advice? If we have don’t have those long-term financial assets that allow for neat percentage-based charges, how on earth does the financial industry make itself relevant – and affordable – for generation Y?
There are around 13.8m people in the UK aged 20 to 35. We’re forecast to become the UK’s most dominant spenders in another 10 years, from 28 per cent today to 35 per cent of the total consumer market by 2030. Nearly 3 million of us have an Isa, typically worth £3,650 for those aged under 25 and £5,186 for those aged 25 to 34. Today’s 20-somethings will also benefit from record sums being left by caring parents and grandparents.
So we matter. The great news is there is already so much common ground between advisers and young people. We’re increasingly focused on self-care, cultivating a progress mindset and continual professional development (or even reinvention). On top of that, we are leveraging the good old Bank of Mum and Dad to best effect and managing our 'life admin' through our phones.
The very best advisers major on clients' future goals and specialise in holistic and intergenerational financial planning. These are all excellent foundations. So use today’s more common trigger points – leaving formal education, flying the family nest, starting a first job – as big moments for reaching out to us.
Many advisers see themselves as financial educators first and foremost, and product sellers a distant second (if products come into the equation at all). Even if you lack the resources to build your own education hubs, you can support and partner with existing industry efforts to educate consumers. You can become a coach or a mentor, or you could tell more human stories about the possibilities created by financial planning through engaging video and blog content. And you can use app-based technology to introduce yourselves to potential clients and monitor their progress.
Many parents today care more about their kids’ prospects than their own. These parents can act as gateways to the younger generation and foster a culture of 'co-planning' by encouraging clients to bring their children to planning sessions.
This is not just about attracting prospective clients. There are clearly benefits to be gained from promoting, encouraging and respecting young talent within your own firm too. That means adopting an enlightened wage policy, and not exploiting young people to deliberately underpay or overwork them (as has happened to me far too many times).
Ask your employees about what they want to get out of their careers. Don't make assumptions about them, their lives or their beliefs. Present genuine choices to them, such as the chance to acquire more skills and qualifications. Offer them resources that could help them cope with personal challenges such as mental health problems, and provide scope if you can for flexible or home working.Never miss a chance to create not just a happier, more productive workplace, but a business that is much more relevant for the next generation and infused with amazing new ideas.
I once worked in an office with ping pong tables, personality tests, away days and a constant supply of donuts. But all this sadly meant diddlysquat in the face of unjustified wage discrepancies, sexual harassment and bloated bureaucracy.
Make sure your firm is somewhere where everyone is treated with equal dignity and empathy. Get the big stuff right: there should be firm guidelines on what is acceptable and respectful behaviour. Encourage open feedback and communication, and look to spot younger employees’ strengths and develop them wherever possible.
By doing all this, you can create your very own “youthquake”. And those tremors might just sustain your business long into the future.To read more from the Young Money blog, click here