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JUNE 24, 2022
By Kristen Mayne

Read time: 5 minutes

Working with an advisor is an important way to help anyone reach their financial goals. But for one generation, it seems especially important.

Millennials (those born between 1981 and 1996), are facing a number of financial challenges specific to their generation including:

And people between the ages of 25-40 are also likely have a young family or are starting one which brings new financial challenges. Since millennials face financial challenges unique to their generation, they need to approach planning differently than their predecessors. The “latte factor”—the idea that regularly spending small amounts costs more than we can imagine—doesn’t exactly apply to millennials. Simply cutting back on a daily coffee from your local barista isn’t going to make up the savings gap from the financial challenges that millennials face. Accumulating more wealth requires bigger, long-term thinking. This is where an advisor comes in.

However, millennials are historically resistant to working with an advisor in favour of managing their own finances. And it seems more and more are striking out on their own. A report showed that in 2021 one in three millennials planned to stop working with an advisor or were considering it. But with so many financial stresses, is it wise for millennials to go the DIY route? Or is working with an advisor the better approach? To help you decide, a Financial Planner at Sun Life, Jeffrey Wu, shares how advisors can help millennials ease their financial burdens.

5 ways advisors can help millennials

1. They make it personal

“The first step is to understand where Clients are financially,” says Wu. “We do this by getting a clear picture of your finances.” This involves reviewing savings, cash flow and your family situation.

Next, Wu says, advisors will have an open conversation with Clients. “We want to understand what’s important to them, their goals and their fears. We take this information and use it to build a plan to close the gap.”

Wu says a big plus to working with an advisor is they can give recommendations based on the Clients’ financial needs. “People may be taking advice they find online, but it may or may not suit their situation. Or they’re not sure about the outcome. With an advisor you’ll be getting advice based on your unique situation.”

Watch: What to expect from your first meeting with an advisor

2. They help make saving easier

Even if we’re financially literate , it can be hard to change our behaviour, says Wu. “That’s why we set up automatic biweekly or weekly contributions. When these deductions are automatic, it makes savings plans more consistent. And it helps make saving as painless as possible.”

3. They give you support to stay on track

Social media and online shopping make it easier to spend money (hello impulse buying!). Wu says this, fear of missing out (FOMO), and pressure to make big purchases can affect long-term savings. “We shouldn’t be rushing into these decisions like buying a house or a new car. Especially if someone doesn’t have insurance or emergency funds. With an advisor, you can talk through these purchases so you can make more informed decisions.”

And if you want to make a withdrawal from your savings? You’ll have to talk to your advisor first. And Wu says this can help people make more mindful purchases. “It helps give people a good cooling off period.”

4. They can advise on debt repayment

In addition to student debt, millennials may be carrying other kinds of debt too. Wu says that low interest rates have normalized debt. Wu says many advisors, like himself, offer consultative calls to help people understand where to focus their debt repayment.

He says it’s especially important to talk to an advisor or someone you trust if you’re feeling stressed or helpless. “Avoidance isn’t the answer. It’s important to find the right support to reduce financial stress.”

5. You’ll have an annual meeting

A yearly review can help Clients make more informed decisions about their savings, says Wu. “It also gives Clients an opportunity to update their advisor on their personal situation if it’s changed. Or perhaps their financial goals have changed.”

Read: Financial advisor vs. Robo-advisor: How to choose (infographic)

The power of customized advice

Wu says he encourages younger clients to not be shy if they don’t have many assets. Or if they don’t have a high income. “Reach out for help when you’re not sure what you’re doing. It’s perfectly normal and more helpful than avoidance or being in denial.” Having a trusted advisor by your side helps ease the stress of money management. And freeing up that mental space can allow you to focus on other important things in your life: your family, your job, your friends, for example.

He says not getting personalized advice may have significant impact over time. Compared to those who don’t, Canadians who receive customized advice and have a financial plan:*

  • have higher levels of financial and emotional well-being,
  • feel their financial goals and retirement plans are more on track,
  • believe their ability to save has improved in the past five years, and
  • are more confident they can handle the inevitable bumps in life.

Trusted advice is invaluable and “it’s important to find an advisor that’s right for you,” says Wu. Find your own Sun Life advisor match.

 

An advisor can help put together a solid plan that suits your goals.

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*Source: Financial planning standards council (FPSC), The Value of Financial Planning.

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.