Advisers not relevant for young people
Young people are not going to advisers, as they do not see what they offer as relevant, said Barefoot Investor founder Scott Pape.
“The problem is young people believe they know more about looking after money than people like their employers and financial advisers,” he said.
“The trouble is they don’t, and this is due to the lack of financial education in schools, which is a disgrace.”
Currently, 51 per cent of the population in Australia is under 40, and they are starting to inherit investments from the baby boomers.
But for many young males, their sole interest is “cars and chicks”, Pape said, and then they reach 30 and realise they have no assets.
“Then the ‘triple Ms’ are looming — marriage, mortgage and midgets — and they start to worry.”
Pape wrote the book The Barefoot Investor, which gives young people an insight in managing money and creating assets.
The book sold 6,000 copies in the first week of its release.
Pape said most young people seek information from the web, and most financial adviser and fund manager web pages are written for retirees or people who have money.
Generation X and Y search the web for all of their information, so they disconnect with websites that are not aimed at them.
Pape said that while many young people do not have great sums to invest, if anything, they are still inheriting and some will become high-net-worth clients.
To reach this audience, Pape arranges seminars where people have a drink and talk. The advice on managing their money comes later in the evening.
This is followed by an email to engage them, and it is sent every month.
Pape argued the outlay for the seminar is minimal and the amount of time given is manageable for the adviser.
“If you do this you will start a growing list of young people who will grow into good clients,” he said.
“But very few advisers do this and it is a way of regenerating your business.”
Interestingly, young people are happy with superannuation contributions and many believe the rate should be 15 per cent, he said.
“Young people want higher superannuation, as they see this is a way to save for their financial future.”
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