Lawyer, accountant, programmer — member of the gig economy? Yes. Lately, the word “gig” has taken on a new meaning, referring to workers, often highly skilled professionals, who take on a particular task for a defined time and don’t have permanent employers.
Some opt for this lifestyle while others freelance out of necessity, but, either way, the freelancer ranks are substantial. According to a Freelancers Union study from September 2014, 53 million people (about 34 percent of the U.S. workforce) are working in a freelance capacity, and about a third of them are over 35. All of this means that freelancers and contract workers are more likely than ever to end up on your list of clients and prospects. Here are three things to know so you can best serve their financial needs:
1. No worksite means no group life, no 401(k) match and the need for a plan. Because workers in the gig economy are project-based, the age-old excuse, “I have coverage at work,” does not apply. Without the minimal life insurance coverage and jumpstart on retirement planning that a 401(k) match can provide, these individuals are a step behind their counterparts in traditional work environments when it comes to benefits. Yet, 77 percent report that they make the same or more money than they did before they started freelancing, according to the same Freelancers Union study from September 2014.
Here is where you come in. This is a group that has the financial capacity to plan but they need assistance. Just because someone gets an ”irregular paycheck” doesn’t mean they don’t have the money for professional advice, planning, and products. Financial professionals could be missing out on this hidden economic gem. The underserved can become hot prospects for you.