Even though I’m a father to two daughters and we have regular conversations about setting financial goals, I’ve fallen into the trap of thinking that it can be difficult to engage with younger generations when it comes to finance.
But the feedback I get from my daughters is that we don’t do enough to reach out and speak to younger consumers who have advice needs that are not being met.
This is backed up by communications consultancy MRM’s recent Young Money report, which found that a staggering 90% of under-30s want financial advice.
Why has our industry struggled to reach and engage this group of consumers for as long as I can remember? This is definitely something we can’t ignore any longer. As our existing clients are getting older, we need to think about the generations that follow.
A recent Schroders study revealed that 53% of advisers have seen the average age of their clients increase over the past five years, with 68% saying their typical customer is aged 51-64.
The feedback I get from my daughters is that we don’t do enough to reach out and speak to younger consumers
Unsurprisingly, then, 62% of advisers are worried about what this means for their business, as wealth transfers between generations.
So, the big question is: how do we tackle this before it’s too late?
One of the reasons client banks are ageing is because younger clients are often seen as unprofitable as they build their wealth. True as that may be, it’s incumbent on us to find models that fit them, rather than waiting for them to fit existing models.
I’m not here to tell you how to do that – each firm is different. But protection should play a central role.
The UK is chronically underinsured, which means there is huge growth potential in this part of the market. According to the FCA, less than one in three of us (30%) have life insurance in place. The numbers for critical illness cover (13%) and income protection (5%) paint an even bleaker picture.
While the opportunity is obvious, I understand that taking advantage of that opportunity is easier said than done. As the old saying goes, protection is ‘sold’ and rarely ‘bought’. Most people don’t want to think about the worst happening.
However, challenging accepted wisdom is the key to progress – and this is one truism that needs further interrogation, in my eyes. A recent study has reinforced my belief that clients – especially younger clients – are more willing to engage with protection than we give them credit for.
As the old saying goes, protection is ‘sold’ and rarely ‘bought’. Most people don’t want to think about the worst happening
The Association of Mortgage Intermediaries’ (AMI) recent Protection Viewpoint found that 65% of Gen Z and 70% of Millennials think it’s important to have income protection in place. That compares to 48% of Gen X and 39% of Baby Boomers who said the same.
So, in other words, young people want protection, and they need our help to find the right products.
In rugby terms, we’ve got a kick right in front of the posts – but we’re in danger of missing it. With Gen Z and Millennials set to inherit $38 trillion globally over the next two decades, the stakes couldn’t be higher.
If we don’t engage clients while they’re young and still building wealth, they’ll go elsewhere for their advice needs. But if we connect with them early and demonstrate the value of protection, helping them set savings goals and lay strong financial foundations for their future, they’re far more likely to become loyal long-term clients.
This isn’t just about growing your business – it’s also about securing its future. And for those with one eye on the exit, having a younger client base makes you more attractive to potential buyers as you can demonstrate better long-term earnings potential.
So, if you’re looking for ways to take our business onto the next level in 2025, think about how protection and reaching younger clients fit into your overall strategy.
Richard Harrison is chief executive officer of Sesame Bankhall Group
