In 2008, when the financial market collapsed, the oldest millennials were 30 years old. This generation saw their parents lose significant equity in their homes or even worse, lose their homes completely. Many millennials’ retirement-bound parents had to postpone retirement due to investment losses.
With this backdrop, it’s easy to see how millennials’ perceptions of financial markets have been shaped. Keep the following three perspectives in mind as you begin to reach out to millennial clients.
Millennials are financially conservative.
As a group, young adults have shed substantially more debt than other generations during and after the Great Recession. In 2001, 50 percent of this generation carried consumer credit card debt; in 2010 only 39 percent carried credit card debt according to Pew Research. In addition, fewer young adults are taking on the debt of home and cars. Millennials may understand the importance of managing debt, but they consider themselves unschooled in financial products and may not know much about disability insurance. Many are making less than the previous generations, with fewer employee benefits, including disability insurance. This presents a good opportunity to explain the product and stress the importance of protecting their paycheck.
Millennials value their paychecks.
This group has seen the unemployment rate at its highest in decades. The threat of layoffs is very real to them. They know the importance of a steady paycheck. Remind them that layoffs are not the only way people find themselves without a paycheck, then introduce disability insurance and the sense of security it offers. In 2015, this group will make up more than half of the workforce. This is the market most in need of disability insurance. College debt weighs heavy on the minds and pocketbooks of millennials. According to Pew, 40 percent of younger households carried student debt in 2010.
Millennials are savers.
Of those millennials who have started saving, almost half (46%) are saving between 1-5 percent of their income for retirement; 31 percent are saving 6-10 percent; 18 percent are saving more than 10 percent according to a 2014 Wells Fargo study. Clients with a long-term view about financial matters are much more receptive to protecting against unnecessary risks. In that regard, this market is more open to learning about financial products. They may not seek out the advice of a financial professional initially, as they most often they follow the advice and counsel of their parents. Use your relationship with their parents as a way to establish your connection with them. As their trust grows they are more likely to add you to their list of financial advisors.
Kick off 2015 with a marketing messages that appeal to millennials. Over the next several months, we will continue to bring you information about their financial thoughts and behaviors.
Remember DIS is your disability insurance resource, with helpful marketing ideas, tools, product education, and assistance with quotes. Contact us today to learn more about the products we offer or submit a disability insurance quote request here.