Financial planning and wealth management are important for everyone, no matter when they were born. However, the millennial generation – sometimes called Generation Y – face a host of significant challenges that past generations do not.
Millennials, generally defined as those people who were born between 1981 and 1997, grew up in the shadow of one of the worst economic crises in history. Many younger Millennials watched their parents lose a lot of their savings and investments while their older counterparts may have lost their jobs. Others are sitting on significant education and related debt. As a result, this generation developed an inherent distrust in financial institutions.
Today, many millennials are raising families of their own without having pursued any type of financial planning or wealth management strategies. Many carry a significant debt load and have no formal plan for their – or their children’s – financial future.
Sources of Millennial Distrust with Financial Planning
Decades of market instability and scandals from Enron to Wall Street were the backdrop against which Gen Y came of age. Millennials actively distrust (and dislike) the government, the stock market, mortgages and the traditional banking system.
What this generation does trust is technology. Unfortunately, fintech is less of a friend than many Millennials think. Pseudo-banking products (i.e., Chime) and stock trading apps can be as much (or more) of a drain on Gen Y’s cash position than traditional approaches.
Meanwhile, they hear about developers of financial apps and robo-advisers getting rich.
The Significant Financial Challenges Faced by Millennials
Generation Y worries a lot about their financial future, yet few are engaged in any formal method of financial planning. They carry a high debt load, including student loans and credit cards that are charged to their limit. More than 75 million strong, the millennial generation is set to retire in less than 30 years, yet the majority of Gen Y has less than $50,000 saved toward their financial future.
The inherent do-it-yourself attitude that this generation has for investment strategy places them in further financial jeopardy.
With the advent of day trading apps like Robinhood, many Millennials now find themselves in an even worse financial position. With little or no investment experience and a drag-and-drop investment interface on their smartphones, the fallout has been significant.
Personalized Financial Planning for Millennials
As much as they might be struggling today, Millennials are set to be the beneficiary of the most significant wealth transfer in history, In fact, Gen Y is set to inherit somewhere in the neighborhood of $30 trillion, according to industry experts.
Despite this generation’s pervasive distrust for traditional investment advisors and financial consultants, no one-size-fits-all fintech solution can provide the personalized level of benefit that a certified financial planner or wealth management advisor can.
Resource Planning Group understands the challenges that Gen Y faces, and we are intimately familiar with the resulting fears regarding future financial security. Our experienced Atlanta financial advisors – several of which are Millennials themselves – take a unique approach to meeting the needs of our clients. Contact us today to learn more about how we can help you prepare for a secure financial future, no matter what generational category you fit in.
DISCLAIMER: It is important to note that this information is not meant to provide investment, tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, investment, tax, legal or accounting advice. You should always consult your own financial planning, tax, legal and accounting advisors before engaging in any transaction.
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