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:
- Higher than ever student debt
- Soaring house prices and high rent
- Unemployment or gig employment without benefits or a pension
- Volatile stock markets
- Rising cost of living and inflation
- Rising interest rates on mortgages
- The COVID-19 pandemic
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.”