Given all that, you'd expect that millennials would really want some professional financial advice -- and they do. But while they'd like the help of a money pro, most don't feel they can afford it: 55 percent think they don't have enough money to get the assistance they need.
The good news for them is that they're mistaken: While that affordability disconnect may have existed in the past, a new way of providing financial planning advice is gaining popularity. Planners who work on a monthly retainer are good news for millennials.
Why the Financial Services Profession is Changing
- Gen Y advisers see that their peers are not being serviced but are asking great financial planning questions (for example, "Should I contribute to a 401(k) or a Roth IRA?").
- There's a shift afoot to get away from pushing commissioned products that clients don't actually need.
- Advisers want to serve a broader client base, regardless of their accumulated assets.
- Advisers are placing greater emphasis on the power of financial planning, rather than focusing solely on investment advice.
What if you could work with a financial planner for the price of your monthly cell phone bill, would you? A new group called the XY Planning Network is providing fee-only financial planning on a monthly retainer so that you can do just that. These certified financial planners are all geared to help Gen X and Gen Y clients with their money. I'm proud to be a founding member of XYPN.
I work with clients in their 20s and 30s across the country, and I'm 30. Here are some reasons I've noticed why most people prefer to work with a financial planner of the same generation:
- Gen Y advisers can directly relate to the needs of Gen Y clients. We are in a similar life stage and often have similar values. For example, I love to travel, and all of my clients value travel as well.
- More flexibility in how they work. I work virtually with my clients, and this is ideal for them because it is easier to schedule a meeting after work or on a Saturday. There's no commute, and they don't have to take time off of work.
- It's not all about retirement planning. Financial planning for millennials includes budgeting, strategizing around student loans and other debt, building savings, tax planning, buying insurance (or not), choosing company benefits and a whole lot more.
*(Survey respondents included 1,639 millennials between age 22 to 33, as well as 1,529 baby boomers age 49 to 59.)
Sophia Bera is a virtual financial planner for millennials and the founder of Gen Y Planning. She is location-independent but calls Minneapolis home. Do you want to be better with your money than 90 percent of your friends? Then sign up for the free Gen Y Planning newsletter.