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  • K O Jones

What's important to younger clients

Published by Aviva Investors November 20



For the typical adviser dealing with clients in their twenties and early thirties can seem a little strange. What are their passions, interests? What gets them out of bed in the morning?


Happily our research – based on a Quantum Customer Segmentation – shows they’re not very different from previous generations, only with one main exception.


Technology.


For them tech isn’t just an enabler. It’s woven into the DNA of their daily lives.


And social media isn't something the choose to do when it suits them but a multi-stranded way of networking that’s as real to them, perhaps more so, as the real world.


According to our stats 81% prefer online experiences. 75% make the effort to shop on the web for a better deal. 41% prefer buying their financial products online.


But their financial confidence is low at just 8%.


They need your help.


Our researchers looked at a very particular segment; all under the age of 35 and mostly childless.


It’s important to stress that the average income of our sample was just £21,000 per person, which puts home ownership out of reach without some kind of subsidy, either Help to Buy or The Bank of Mum & Dad.


Less than 10% were in the £40 to £50K income bracket and just 25% were employed full time.

Freelance and zero hour contracts have made an enormous difference to working practices. As such disposable income for the majority is a pipe dream, unless they’re still living at home. Just 11% rent and of those that do own their own home the average property value is £239,000.


So who are they exactly?


Our segment roughly fell into 3 groups; all of whom you’ll recognise, but with some very important differences.


Group 1: Loadsamoney


Remember Harry Enfield hamming it up as Loadsamoney – money was an end in itself and spending it the ultimate pursuit.


His spirit lives and breathes today.


Only with one vital difference. He or she is quietly sacrificing home comforts now in pursuit of wealth later on, saving it all for a mortgage on his first home. They may even have aspirations of owning more properties in future. Admittedly, this ‘money saved up for later’ group accounted for just 15% of this age group, but they’re an important segment.


As such they should be thinking about a pension, unless they plan to emulate their parents and are hoping to benefit from the property boom enjoyed by the baby boomers with buy-to-let; expecting to earn rental income further down the line. How realistic that is post-Brexit and with new stamp duty legislation on second homes remains to be seen. But the ambition is still there.


Suffice to say with this group long term goals are what matters.


Group 2: In a Relationship


This is a fairly privileged group because partnership status confers them with the ability to get a mortgage or rent together.


However, job uncertainty means life isn’t without its stresses. Also, starting out on the career ladder can mean that it’s easy to fall into the trap of living beyond their means.


They too are ambitious. But their aims are more focused on self-fulfilment. They have ambitions of starting their own business or finding a better job.


They focus on the big picture and figure out the detail afterwards, and are very much reliant on advice from those in the know.


They probably have a small pension pot, and they appreciate that they need to do something about it (39% of this age group understand what provisions they need to make to retire), but they’re still in the spend now and think about it later phase of their lives. They need a nudge to think about pensions seriously.


Group 3: Caring and committed


The third group is more inclined to have a social conscience. Environment and fair working practices really matter to them.


Altruism is something they aspire to, even though they might not have the means at the moment.


Being more introspective they are also more careful and considered in their approach to life, and as such products like Income Protection and Critical Illness Cover will make sense to them, providing they can afford it.


Ethical banking and investments are also of interest, though they're probably still paying off student loans.


As such they're careful with money, know how to save and may invest from time to time. Pension-wise they also harbour hopes of investing in property to create a pension pot for later life.


What’s Common to all Three Groups


No one it seems is particularly switched on to the idea of compound interest. They need educating.


20% will probably inherit money but that leaves 80% exposed.


Though 53% understand and value insurance. So that is probably a good place to start when you’re opening up a dialogue.


Interestingly all of our interview subjects factor fitness and gym membership as a big consideration in their lives. Either they follow a fitness regime religiously or they remark that they wish they had the time to devote to more exercise. The Instagram generation are very conscious of their looks.


Socialising and drinking are also top of the list, unsurprisingly. Which is why, according to more recent research in the midst of the pandemic, they are suffering more than most.


And of course tech is always there in the background, filling in the dots between different aspects of their daily lives. In fact 29% are early adopters of brand new tech, a higher figure than those with children (22%), while 77% are still single.


All three groups mention that they are constantly on their smart phones. Either keeping up with friends and family, for entertainment or playing games.


So, whatever you do, do make sure your website looks good on mobile.



Sources:

Aviva’s Stepping Up report pub. 2017

Aviva’s Age of Ambiguity Report pub. Nov 20

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