How to provide financial advice for millennials

Republished with permission from CommSec

In truth, millennials – those born between 1980 and 2000, also called Gen Y – want the same things their parents did. Meaningful work, decent pay and the chance to get ahead. But there are differences in how they approach their finances, and changing demographics mean advisers can’t afford to ignore their preferences.

Millenials are already the largest group in the Australian workforce, at 34% (compared to 25% of baby boomers). By 2025 Gen Y and Gen Z (born after 2000) will each make up roughly a third of the workforce alongside just 8% of baby boomers1.

What they want

“I want to get ahead but I still want to have a life without living beyond my means”, says Dave Burello, 31. Although he’s always been a saver, he says the realisation hit when he turned 30 that he didn’t have a plan in place or financial goals for the next 10, 20, 30 years.

Burello sought advice from Caleb Dozzi, Managing Director of Brisbane-based Dozzi Financial Advice. Dozzi says younger clients value his transparent fee-for-service, no-commission model. “They’re quick to understand if advice is best for them or best for your business”, he says.

Because of their life stage, millennials are looking for more than traditional areas of advice such as super and insurance. They generally don’t have many assets, but their income is growing. They may be going into significant debt for the first time for a home and they want advice about how to save a deposit. Or, if they already have a mortgage and children, they want to know how to meet their growing financial commitments without impacting their lifestyle.

These are huge steps, not just financially but from a learning point of view. Dozzi says the core of what millennials are looking for is cash flow planning and help in developing good money habits so they can get ahead.

With Dozzi’s help, Burello says he has a clearer understanding of his cash flow position. On top of that, he has set up separate accounts for expenses, discretionary spending and savings and set a short to medium term goal to buy his first property and tweaked his super to better reflect his risk profile.

“He also gave me advice about scalability, that a 5% return on a $500,000 investment is better than a 5% return on a $50,000 investment”, says Burello.

The obstacles and advantages of millennial clients

The challenge is how to offer the personalised service and level of connection young clients want at a price that’s affordable for them and your business.

Part of the answer is technology. Dozzi uses “half a dozen” programs to gather data and provide almost live cash flow information to his IT savvy clients. It also leads to referrals.

Dozzi estimates three out of five referrals he receives are from the under-40s. “They talk to each other; if they’re excited about an experience they tell everyone,” he says.

They are also open about their finances and will provide personal information quickly if they trust you. In contrast, older clients are more likely to see their finances as private and often won’t even discuss them with their family.

But technology can take you only so far. Equally important is the ability to listen and develop an ongoing mentoring relationship rather than a purely transactional one.

“He helped me understand. It was more about education than products”, says Burello.

While no two clients are alike, Dozzi’s younger clients tend to fall into two groups. Some are very motivated to achieve financial freedom; this type is more actively involved and has significant financial goals. The other group is less motivated by wealth, but want to make sure they’re doing the best with what they have.

In the end, the benefit of attracting and keeping millennials is not just financial. “They’re happy, motivated, excited and fun to work with”, says Dozzi.


1‘Future Fund: 5 megatrends changing everything’, Cuffelinks, 7 December 2017,

Important: This article has been prepared without taking account of the objectives, financial or taxation situation or needs of any particular individual. Before acting on the information, you should consider its appropriateness to your circumstances and if necessary, seek appropriate professional advice. Any information used in this article is for illustrative purposes only.

Read the original article here.
Recent Posts
Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text.

Start typing and press Enter to search