Financial advisors should focus on attracting millennials as clients as the members of this generation are beginning to establish themselves financially, according to Peter Drake, vice president of retirement and economic research with Fidelity Investments Canada ULC.
Contrary to perceptions that millennials are generally unambitious, unemployed and apathetic about their finances, this generation is beginning to gain economic clout and is financially engaged, said Drake at the Canadian Institute of Financial Planners' annual conference in Vancouver on Friday.
"The reality is different," Drake said. "In reality, millennials are deeply concerned about money."
As baby boomers begin entering retirement, he added, advisors will need to focus on engaging members of this younger generation.
"As the boomers are winding down, as they're withdrawing from their retirement portfolios and ultimately dying off," Drake said, "you're seriously going to need those millennials down the road — and I think you're going to be quite happy to have them [as clients]."
Drake acknowledged that millennials are facing multiple financial challenges, such as struggling to establish their careers after having entered the workforce during a difficult economic period, and grappling with high housing costs that are forcing many to live with their parents far longer than previous generations.
However, he said historical data show that millennials are no worse off than previous generations. In fact, he said a higher proportion of individuals aged 25 to 34 are employed today compared with that same age bracket in 1984.
"The fact is that there is actually lower unemployment among millenials today than there was among the boomers back in 1984," Drake said.
Millennials already comprise almost a third of Canada's employed population, Drake said. Future employment prospects for this generation are very strong, he added, as members of the baby boomer generation are poised to begin retiring in massive numbers.
"We will be experiencing a shortage of workers," Drake said. "Demand for labour will give [millennials] jobs, and their wages will go up."
Overall, Drake said, the generation shows strong promise. "It might look to some people like the millennials are in bad economic shape, but if you put any kind of historical perspective on it, and if you think about what's going to happen with the supply and demand of labour down the road, I think they are, and they will be, in pretty good shape," Drake said. "They're really on track, just the way the boomers were."