Although retirement confidence has increased, according to the EBRI 2016 Retirement Confidence Survey, many individuals don’t start saving early enough, and still others don’t save as much as they need to for a comfortable retirement. This has created a tremendous opportunity for financial advisors to help both individual investors and retirement plan participants ramp up their retirement savings. Of course, not all clients are created equal, and the needs of these individuals is likely to vary depending on their generation—whether it be Y, X, or Baby Boom. What you need is a way to refine your retirement savings recommendations by generation, and that’s just what I’m going to help you do here.
How to Reach Millennial Clients
According to the 2014 Wells Fargo Millennial Study, millennials don’t have a lot of faith or trust in personal financial experts. So, if you want to reach this generation, you’ll need to focus on building trust-based relationships. A good place to start may be with the millennial children of your baby-boomer clients, keeping in mind the following tips.
Remove preconceived notions. Most millennials don’t think they need a financial advisor, primarily because they don’t feel they have or earn enough money. To help dispel this preconceived notion, find transparent ways to show millennial prospects how you can help them and why it’s important—even at their age and level of asset accumulation.
Be more casual and approachable. Millennials are known as the most informal generation. With this in mind, try meeting in a more casual environment and leave the suit and tie at home. You want to show them that they’re on a level playing field with you as their advisor.
Embrace technology and innovation. This generation grew up in an era of constant technology advancements and innovation. As such, they will be looking to you for technology-based interactions: think e-mail and videoconferencing rather than phone calls and voice mails.
Be active on social media. Millennials grew up with social media and are comfortable both sharing their own lives and looking at other people’s lives online. It’s likely that your millennial clients will track you and your practice through social media. So be sure you post content geared toward them and issue event notifications and reminders to them through social media platforms.
Encourage collaboration. Millennials prefer guidance and discussion, and they want the opportunity to personalize their plan and be part of the process before a strategy is implemented. Welcoming a collaborative environment will help millennials feel more comfortable having a financial discussion and making decisions thereafter.
Key Issues for Millennials
Managing debt. Millennials are the most indebted generation in history. The previously cited Wells Fargo study reports that 47 percent of millennials use more than half their monthly income to pay off debt, and only 55 percent have started saving for retirement. Before they feel like they can save, millennials may have other issues to address first. Here, your job is to help them come up with a balanced budget to both manage their debt and start saving.
Changing jobs. A recent Future Workplace study found that 91 percent of millennials expect to stay in a job less than three years—meaning they often aren’t eligible for an employer savings plan. But as you’re well aware, this doesn’t mean millennials shouldn’t be saving for retirement. You can show them how beneficial it can be to open an IRA, as well as explore opportunities to help these clients with rollovers if they are in an employer plan.
How to Reach Generation X and the Baby Boomers
You’ll also want to make sure you’re in tune with the needs of the Gen X and baby boomer. Although these two groups are in different stages of life, their needs are more closely related to each other’s than to those of the millennials.