Helping millennials start saving

Many Canadian millennials have put saving for long-term goals, such as retirement or a major purchase, on the backburner for now, according to a recent survey commissioned by Toronto-based Bank of Montreal’s (BMO) wealth-management division.

Instead, the survey shows that millennials — the demographic born between 1981 and 2000 — believe paying down debt is their top financial priority, while finding meaningful or better paying employment ranks second.

As for retirement, 41% of millennials say it’s “too far off and I have more immediate priorities.” However, almost a quarter of survey participants (24%) expressed concern over their ability to afford retirement in the first place. Those numbers increased to 30% with older millennials.

For millennials who do have the financial ability to save — either for a major purchase or home ownership — they’re stowing money in savings accounts rather than RRSPs and TFSAs.

In fact, the survey shows that only 20% of millennials are taking advantage of TFSAs and only 13% are using RRSPS. In contast, 39% of millennials are putting money into savings accounts.

Furthermore, the results of the survey indicate that financial knowledge is becoming an increasingly large concern for millennials as their income begins to grow, making this a prime opportunity for millennials and financial advisors to connect.

Among the top three characteristics millennials expect from their advisor is the ability to provide personalized advice (58%), knowledge and experience (55%) and a high level of service and ongoing communication (47%).

Responsible investing and the use of innovative technology were also listed as qualities millennials seek from advisors, albeit less often.

Financial planning is one important way advisors can help millennials prioritize goals and determine their next steps in order to achieve them, the BMO report reveals. Advisors can also share their experience and expertise to help millennials improve financial literacy.

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