74% of people would like a financial adviser or planner to help them predict the financial impact of major life events, according to research from Scottish Widows. But, that’s not the statistic that jumped out…
What’s a little more surprising is that 24% of millennials, aged between 18-34, would like advisers and planners to help them prepare for ‘adulting.’ That includes rather more predictable events, such as:
- Having children
- And divorce
People over 35 in the same study were four times less likely to require such a fundamental level of advice. So, why do the millennial generation lack financial confidence? Sadly, the answer is because of a complete lack of financial education from an early age.
Financial education only became part of the secondary school curriculum in September 2014, as a small component of the citizenship programmes of study at Key stages 3 and 4. It is still widely overlooked, and what is taught really doesn’t go far enough.
Doing our bit
We are not just here to help your tax efficiency grow and protect and pass on your wealth, we want to help your children and grandchildren from an early age too.
As Chartered financial professionals, we are visiting schools to deliver financial awareness sessions to students. As part of the Discover Fortunes programme, an initiative by the Personal Finance Society, we are volunteering to help students understand the different elements of investments, pensions, savings and protection and their application to the needs of a range of specially developed characters and financial scenarios.
As well as financial education, it raises awareness of careers in financial planning, helping to lay foundations for the next generation of Chartered Financial Planners. This isn’t just beneficial for the students, it might mean they need to call on you as the Bank of Mum and Dad less often when it comes to bigger purchases!
A report from Legal and General found that in 2018 parental lending would be the equivalent of a £5.7bn mortgage lender. In fact, it was estimated that 27% of all buyers will receive financial help from friends or family that year to help fund 317,000 homes.
Furthermore, your children and grandchildren will be more financially savvy when the time comes to inherit wealth or receive large gifts as a result of Inheritance Tax planning.
The evolution of financial planning
It’s clear that to maintain a relationship with future generations our profession must adapt and evolve. The Scottish Widows research also found that those aged 18-34 are much more open to new forms of communication, with more than one in 10 of young adults preferring to be contacted via social media.
Millennials investment preferences are also different than the average investor, as 32% aged 18-34 would like advice on how to invest ethically, in comparison to 23% of others surveyed. In today’s world, we are increasingly valuing responsible consumption and ethical financial choices. Something we at HFMC are equally passionate about, having launched a range of positive impact portfolios which you can find out about here.
Securing future generations
In the long term, a good foundation of financial knowledge and support from Chartered planners will help future generations achieve their goals and aspirations. As you can appreciate, identifying those aspirations is the first step in planning towards them. This helps give clarity, confidence and a better understanding of the future.
As strong advocates of lifetime cash flow planning, we can help visualise how children’s wealth can work for them in decades to come. We believe that forward planning and advice enables you to make the best possible decisions and we are now working with several generations of our client’s families.
The monetary benefits of engaging with a financial planner has been demonstrated in a study conducted by ILC-UK over a nine-year period.
Affluent individuals that received advice, on average, accumulated 17% more in liquid assets and 16% more in pension wealth than those investing without. They were also 6.7% more likely to save in the first place, and 9.7% more likely to invest in equity markets.
Working with our financial planners and our wealth management team will provide you and your children with access to a one-stop financial solution handled with individual care and absolute professionalism. We understand that ultimately, our long-term success only follows from yours and the future generations. Our aim is to give you the peace of mind needed for you to be able to enjoy the wealth that you have been creating.
If you’d like any more information about our involvement with the Discover Fortunes programme or would like help approaching financial matters with younger generations, we’re here to help.