A new report from FP Canada, Values & Priorities of Millennials in Canada Synthesis & Application Report, based on research from the FP Canada Research Foundation, highlights key differences about millennials that financial planners must be mindful of when working with millennials at every stage of the financial planning process.
At more than 25 per cent of Canada’s population, the group points out that millennials are one of the largest generations of Canadians. “Who they are and what they will be will have profound implications for financial planning,” they state. “This report provides an in-depth profile of the financial experiences of Canadian millennials.” The report, they add, is intended to help financial planners understand which questions to ask to really get to know their millennial clients.
“Many millennials are attempting to follow the recipe for success handed to them by their parents and wider society: get a good education, get a stable job, get married, buy a house, start a family, save, retire. However, millennials have been met with notable challenges. This highly educated cohort graduated with higher levels of debt than previous generations and emerged into one of the hardest job markets in a century,” the report states. Erratic income streams leave many of these workers vulnerable to shocks and make it hard to pay down accumulated debt. The group also feels alienated from the traditional dream of a middle-class life.
“Millennials are defining new markers of success, charting a course for themselves that looks quite different from the ideals of previous generations. The increasing elusiveness of the middle-class dream is having wider effects, even on consumer segments for whom that narrative is still quite accessible,” they write.
The study looks at trusted sources of information for millennials and examines the largest inter-generational wealth transfer in history and how it is playing out in its early stages. (They say gifts from parents to their children have a huge impact on the distribution of wealth and the life outcomes within the millennial generation.)
“In terms of delivering high-quality service to this cohort, planners should first and foremost be aware of the unique challenges this generation is facing and the different set of objectives they’re looking to achieve with their money,” the report states. “This includes probing for markers of professional and financial precarity, along with the downstream effects these dynamics can have on financial confidence and perceived financial control.”
They add that custom solutions to replace supports that were traditionally available to long-term, permanent employees that were not typically the focus for older cohorts, take on new significance for this group. Planners should also be ready to build recommendations which support renting and progressive retirement, as opposed to a retirement which occurs overnight.
“This report aims to produce and socialize accessible, actionable content for financial planners,” they say, “helping them to promote the financial wellbeing of millennials through improved professional practice. Considerable work has been done to build the knowledge base about millennials and their finances, but that knowledge base has remained fragmented. The present study distills that knowledge into accessible, practical insights.”
