Millennials – those aged between 18 and 34 – are an increasingly important subset of society. Not only are they growing in affluence, they are also growing in influence. But despite this many, including in the financial services sector, still struggle to understand how best to reach them. Scepticism remains about whether this group is even worthy of their attention. Others are more pragmatic: they see there will ultimately be value in targeting this group, but unfortunately they simply do not have the resources at the moment to serve this group adequately without making a loss. So how can this be done? Let’s consider the facts.
As a group, millennials are predicted to make up 50% of the global workplace by 2020 according to PwC. As they progress through each of the life stages, they will increasingly come into contact with the financial services sector.
Currently, millennials have relatively simple needs, particularly younger ones, who are likely to need little more than a bank account and basic savings account.
However, that is all about to change. In the coming years, a cascade of wealth could see this age group inherit around £400bn according to Royal London. Compound this with the steadily increasing pay packets that come with growing professional seniority and we suddenly have an avalanche of assets flooding its way into the pockets of this age group. The industry must be ready to find ways to serve their needs.
How to do this? Success will depend on understanding the unique needs of the millennial, whose defining characteristics include a preference for ‘experiences’ over materialistic goods and a more purpose driven outlook. Equally, however, millennials want what the general public wants – good quality services at a fair price that they feel they can trust, as well as the security of knowing that help and guidance is available should they need it. They also cover a broad group – the younger ones are just starting university while others are firmly established professionally with growing families and burgeoning assets.
This LinkedIn group aims to examine approaches to getting the financial services sector to engage with this group while speaking to millennials themselves about what matters to them and how they want to be engaged with. It will offer ideas on how the industry (in all its subsets) can reach this group early and start to build long standing and mutually rewarding relationships. With levels of financial understanding low in the UK, we will also consider how education can boost levels of engagement and confidence of millennials in this sector and how better financial education can be achieved.
As a subject that is coming more and more to the fore as the financial sector looks for more and more ways to boost profitability and enhance its services and products, I hope this group will raise as many questions as it hopes to answer.