Born in the early 1980s and later, Gen Ys are entering the workforce in their droves and financial planners should consider how they are marketing themselves to this much-maligned generation.
In the US, those born between 1980 and 2000 are predicted to make up the largest part of the workforce within a decade and a similar shift is likely in Australia.
While the tech-savvy nature of a generation that grew up with BlackBerrys, laptops, mobile phones and other gadgets is often overplayed in the media, Gen Y clearly prefers to communicate through e-mail and text messaging rather than face-to-face contact.
The stereotype is that Gen Y craves attention in the forms of feedback and guidance, appreciate being kept in the loop and seek frequent praise and reassurance.
From X to Y
All My Funds general manager, Robert Manityakul, believes planners should look to grow their client base by expanding advice from baby boomers to their Gen Y offspring.
“Planners need to begin to engage with Gen Y now to establish engagement and trust. Unlike Gen X, this generation will look to and take advice from their parents,” he argues.
“Generation Y, by 2018, will make up 28 per cent of superannuation members. They will be as significant in volume by numbers as the boomer generation. They will have the children, mortgages and the most superannuation of any group in history at their age.”
Planners will need to manage the transition of assets, external property investments and family trusts as the older generation, many of whom have been small business owners, begin to move from wealth creation to wealth distribution.
Mind your As and Bs
However, Manityakul says there is a marked difference in the advice being sought.
“Y clients want affordable, value-orientated advice. They will want to engage with the advice through an interactive SoA,” he said.
“Unlike their parents who believed that you worked hard, retired, then enjoyed things later, Generation Y believe in living and working at the same time.
“They don’t want to wait until retirement to live life. Ys want to know not just how they can maximise money; they want advice on how to enjoy life.”
Unsurprisingly this approach often means debt-management strategies are a helpful early service that planners can be providing for the boomers’ Gen Y offspring.
Some studies suggest that the average debt of a Gen Y in the early stages of their career is already $20,000.
“Planners need to make time for the Ys as these clients will grow to be the A and B clients of the future,” said Manityakul.
