With more and more millennials looking to invest in property, we look at the many ways advisers can reach out to younger people.
Changes in financial sentiment and the government’s recent stamp duty relief plan are transforming ‘Generation Rent’ into ‘Generation Buy’. The pandemic is leading young people to take a closer look at their financial situation, with millennials increasingly investing in property as a way of securing their future (and perhaps prevent another lockdown with parents!).
Such changes in sentiment include growing demand for life assurance, with an estimated 40% of 25-44-year-olds now considering it. This was also revealed by LV="," which recently announced more than eight million people in this age group had considered income protection in the three months prior to the survey. However, despite such demand, an advice gap still exists, with many young people still wrongly believing financial advice to be expensive, difficult to access and often not applicable to their smaller budgets.
Closing the protection gap
Despite such interest in mortgages, there remains a considerable shortfall in the number of people taking out mortgage protection insurance. Latest estimates suggest around 50% of all UK mortgages having no protection insurance. Whilst part of this problem is with people wanting to minimise expenses, there is also a need for advisers to better explain the benefits of mortgage insurance and reach out more to younger people.
Confusion and uncertainty surrounding protection insurance remains one of the biggest issues. Entering the mortgage market can be daunting for first timers. This, combined with uncertainty as to who to ask and the growing acceptance of online comparison sites, means it’s perhaps no surprise that many young people simply ignore mortgage protection. Therefore, advisers need to be more proactive in how they are explaining the benefits of such protection for young people taking out mortgages.
Reaching millennials
Many young people view financial advice as expensive, complicated and often unavailable. Whilst none of this is true, the industry has perhaps not been proactive enough in dispelling such myths. With more young people entering the housing market than ever before, now is the time to show the true value of your financial advice.
Reaching millennials is becoming much easier because many are actively seeking such financial advice – often only requiring a little bit of effort on the part of advisers. Changes that advisers should be making include:
- Creating short, practical, visual guides that are easily read on computers and mobile devices
- Expanding use of video calls to provide young clients with the convenience and reassurance they seek
- Better highlighting benefits that address current concerns, such as salary protection and financial independence
Advances in technology are making such changes much easier and present a great opportunity to reach a growing and important sector. Advertising the benefits of protection to young people should no longer be deemed a waste of time. Not only is there growing appetite for such protection, but such conversations also give advisers long-term dividends in terms of sustainability and nurturing client relations.