How to attract younger clients

If you can capture the attention and trust of a younger client, you could build a relationship that has profit potential for decades to come.

Understanding the key concerns and motivators of millennials and gen Z, who are under 40 and may be just entering adulthood, is key to attracting and retaining younger clients.

Learn more: what is customer churn and how can you reduce it?

What are the biggest challenges facing younger clients? 

With inflation and other factors like Brexit and the Russia-Ukraine conflict sending the cost of living skyrocketing, most people are feeling the pinch.

But for younger people, who are under pressure to reach financial milestones like buying a house, beginning to save for their pension and starting a family, these factors may be felt more keenly.

The fact that the rate of house price rises outstripped wage growth large parts of the UK shows how challenging the financial situation is for lots of young people right now.  

Seeking timely, trustworthy financial advice will help those in their late teens, 20s and 30s maximise the amount they can put towards the things they really care about.

But with retirement potentially 45+ years away, it’s hard for younger people to sacrifice funds they can use for more immediate experiences, like holidays, for a future that seems so distant.  

To encourage younger people to give you their time, money and trust, it’s important you understand what makes them tick in both a lifestyle and financial sense.  

Do younger people need financial advice? 

In short, yes – and the earlier they seek it, the better. Whether they’re looking for a guide to investment or are about to enter the home-buying process, timely advice will maximise the chance of a great outcome.

Moneybox shared an example of the difference saving at 25 vs 45 could make to your retirement fund.  

Let’s say your client starts early, investing a realistic amount of £100 per month into a pension pot with an annual growth rate of 5%. By the age of 65, when they’re likely to be ready to retire, the £48,000 they’ve invested could be worth around £131,000 (after fees). If they start saving at 45, even with double the monthly amount, the same £48,000 is likely to be worth just under £77,000.  

It's not just funding their retirement that young people need to think about.

Making smart saving or investment choices can maximise the amount available for more pressing matters, like school fees, travelling and charitable causes.  

To capture the interest and trust of younger clients, here are five things you need to be aware of. 

Five younger client trends you need to know about 

1. Social media is your competitor 

44% of 16–24-year-olds don’t feel confident about managing their finances, but growing numbers are looking to take their financial future into their own hands.

One way they’re doing so is through social media. As the first generation to be raised with these platforms in the picture, this group are also more likely to seek advice via TikTok and Instagram rather than a bank.

But this doesn’t mean that young people will end up well informed and equipped to make the right choices.  

Social media is highly effective at empowering young people and encouraging them to start productive conversations about financial matters. Lots of content is genuinely helpful and informative  

But the internet shouldn’t be the only place they get their advice. Non-specific videos can be reductive and too general at best and misleading, dangerous or downright inaccurate at worst.

Recent examples include videos that oversimplify and glorify incredibly risky investment strategies like options trading put viewers at risk of making poor investment choices that wipe out their hard-earned money. 

2. Investing is firmly on the cards 

Younger investors seem to be more comfortable with investments and are keen to begin investing as soon as possible.

Finder.com discovered that 75% of millennials and gen Z said they’d like to invest in the next 12 months, compared to 60% of their baby boomer parents.

37% are motivated by poor interest rates, which were a paltry 0.35% on average in 2021 and have stayed well below 2% since the 2013. Charlie Barton of finder.com summed it up by commenting:

Older investors, by contrast, have been able to achieve good returns in low-risk savings accounts for much of their adult lives.

Head back to 2007 and you could achieve 5.5% in interest, while a massive 13.5% was the average just 32 years ago in 1990.

As they haven’t grown up with great interest rates on tap, younger investors seem to have a higher tolerance for risk, meaning they may be open to higher-risk, higher-reward investment strategies.  

3. Fintech is growing in popularity 

One of the reasons why young people are more likely to invest is because it has never been more accessible.

40% of millennial investors said simple trading apps were one of the reasons they were keen to invest, and a third liked how affordable this method was too.

You might be hesitant to talk about apps and DIY investment platforms for fear of driving your customers away. But trying to exclude technology from the conversation will do the opposite of proving your worth.  

While you don’t have to be an active user of all the latest fintech, you’ll need to show you understand modern investment and savings platforms to win the trust of younger clients.

Research by CNBC shows that younger investors like to pair digital platforms with advice from a human adviser they can trust. DIY investment platforms aren’t much good without a solid understanding of where to put your money, after all. That’s where an adviser comes in.  

4. Young investors want to use their money for good 

It’s not just the concept of investing that younger clients are interested in.

Growing numbers are looking to make investments that support more ethical businesses or causes. A quarter of US millennials have more than $100,000 in savings, and 95% of this well-resourced cohort want to use their funds for ‘socially-responsible investing’.  

This group are so committed to doing the right thing with their money that 57% say they’ve sold stock if they feel a company isn’t doing right by society or the planet.

Offering products and strategies that are tailored to these ‘impact investors’ will allow you to cater to clients who genuinely want their money to support communities and the environment.  

5. Auto-enrolment has changed the game 

Past generations have had to make a conscious effort to save for retirement or risk having nothing but the state pension as income.

Now, thanks to workplace pension auto-enrolment, some young people might have started saving without even realising. It became mandatory for all workers in the UK who earn more than £10,000 per year and are over 22 to be enrolled into a formal workplace pension.  

Even if your client is only in their mid-20s, they could have hundreds or thousands of pounds sitting in old pension pots that they don’t even know about.

Let's imagine your client is 26 and has been automatically contributing £80 per month to their workplace pension since they were 22 - £3,840 could have built up without them knowing a thing about it.

With your help, they can locate lost pensions and begin actively contributing a more significant amount to a separate SIPP to make their financial future bright.  

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