Recent analysis from Scottish Widows, found that 73% of people want a financial adviser to help them predict how major life moments could impact their finances.
The data found that one in four 18 to 34-year-olds want their IFA to offer real-life scenario exercises for life situations such as marriage, divorce, and having a family, which is four times as many as those over 35.
Jackie Leiper, distribution director at Scottish Widows, believes the findings present an opportunity for advisers to offer a more holistic approach to financial planning, as 45% of IFAs currently offer these types of scenario exercises, while a further 27% plan to in the future.
She said: “The landscape of the advice market has changed dramatically in recent years, and is still evolving within a growing demographic that hasn’t traditionally had the
same need for advice in the past.
“There will also be a greater need to create advice models that reflect the growing intergenerational opportunity around inheritance, and as a result we are seeing IFAs adapting to continue to provide valuable support at milestone moments and in between.”
The data found that those aged 18 to 34 are much more open to new forms of communication. When it comes to receiving annual statements, 20% of people in this age group said they would prefer to be contacted by an automated chatbot, which is almost three times the overall average of 7%.
In a similar vein, more than one in 10 of young people said they would prefer to be contacted via social media, which is more than three times the overall average of 5%.
While 23% of people would like advice on how to invest ethically, this rose to 32% among those aged 18-34, which suggests millennial-age customers value responsible consumption trends and ethical financial choices.
The data suggests IFAs could benefit from showcasing how they can help younger customers invest, as 42% of IFAs are currently experiencing little demand for support in investing ethically.
Commenting on the research, James Wyman, financial adviser at Lyndhurst Financial Management, said: “From my experience, millennials understand the need for financial advice but are not sure of when they should seek it. This may be because they haven’t hit a specific milestone such as marriage, or they do not feel they have enough assets or income to warrant financial advice.
“I find that initially it can be more of an educational process rather than offering financial advice. This can be developed into a triage service if done properly as by demonstrating possible future risks they are able to see the shortfalls in their own life insurance and pension savings, and seek the necessary financial advice when the time is right. As with many things in life you may not see an initial benefit as an adviser by offering this kind of service, however, it can sow the seeds of future clients in years to come if done right.”
Aamina Zafar is one of the UK’s leading financial journalists. She has previously worked as a senior reporter at FT’s Financial Adviser. The award-winning journalist writes regularly on the IFA community, mortgages, pensions and financial regulation.
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