How to tailor advice for different generations
The Financial Advice Association Australia (FAAA) has explored how financial advisers can personalise their service offerings for Millennials, Generation X and Baby Boomers.
The industry body’s report, titled 2024 Value of Advice Consumer Research, acknowledged the age-based differences in the way Australians seek advice.
For Generation Y, or Millennials, this cohort’s key needs to be met by advice include:
- Greater spending confidence in making important financial decisions.
- Help to get the most out of their financial situation.
- Support in defining and achieving their short- to medium-term goals.
Looking at Generation X, this shifted to:
- A realistic plan to achieve a more comfortable retirement.
- Having a sounding board for financial decisions.
- Support in defining and achieving their long-term goals.
Meanwhile, Baby Boomers are focused on:
- A realistic plan to achieve a more comfortable retirement.
- Help to get the most out of their financial situation.
- Reducing financial worries and stress, creating greater peace of mind.
The FAAA discovered that nearly three in 10 Millennials receiving financial advice describe their relationship as providing self-improvement, compared to half as many Baby Boomers.
Moreover, Millennials are more likely than Baby Boomers to have a more holistic view on the benefits of advice, such as its impact on their mental health, family life, work satisfaction and social life.
“The demands of the next generation for financial advice remain high, and their service expectations are different to older generations. Financial advisers must continue to embrace change in their offerings,” the report wrote.
Millennials are also more likely to expect digital engagement in the way they receive advice, the study found. A flexible experience, including a mix of online and in-person interaction, is twice as likely to be important to this generation than older generations.
Overall, advised Australians across Millennials, Generation X and Baby Boomers all reported a better quality of life, financial confidence and satisfaction compared to those who are unadvised.
The report also revealed that trust in financial advisers has reached an all-time high, with 94 per cent of advised clients trusting their adviser to act in their best interests.
It also identified trustworthiness as one of the most important attributes of an adviser, alongside expertise and personalised advice considering financial goals.
“According to clients of financial advisers, the top three ways to describe their financial advice relationship are: trusted and transparent, reliable, and has good rapport,” the paper stated.
AUTHOR
Jasmine Siljic
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