Data & Research April 7, 2015

Millennials Expect to Work Past Retirement Age

Millenials are realistic about their future retirement, with 73% expecting to work past retirement age.
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Millennials are realistic. Nearly three-quarters (73%) expect to work past 65, acknowledging that in old age, safety nets will not be there for them and Social Security will not take care of their needs.

“Millennials hold themselves to a high standard financially, and while they’re realistic about some of the challenges they face, they’re definitely not cynics,” says Rebekah Barsch, executive officer and vice president, planning and sales, Northwestern Mutual.

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While less than half (38%) of Americans age 35 and older have set financial goals, Millennials prove to be more pragmatic. A study by Nortwestern Mutual reveals 53% of Millennials have set financial goals, and another 65% classify themselves as more inclined to save than spend. Barsch classifies the generation as “savers,” adding they recognize the required discipline.

Research shows one in three Millennials point to a lack of planning as the greatest obstacle to achieving financial security in retirement. They are taking responsibility to combat this obstacle and plan for the future, with nearly half reporting they have spoken to their partner, friends, family or an adviser about retirement.

“Members of Generation Y have some exceptionally good instincts when it comes to planning. They’re inclined to set goals and are pretty hard on themselves about how they’re doing against them,” explains Barsch.

This generation is also enthusiastic about their future, as nearly half (46%) who expect to work past the traditional retirement age say it would be by choice. They have “positive expectations about what’s in store for them as they get older,” adds Barsch. Research suggests Millennials are excited by their budding careers and do not envision a future where they will choose leisure over work.

The “2015 Northwestern Mutual Planning & Progress Study” includes responses from 5,474 Americans ages 18 or older, including 1,081 Millennials ages 18 to 34, who participated in an online survey between January 12 and January 30, 2015.

In Practice April 7, 2015

Many Firms Offer a Social Media Assist

Advisers wondering how and what to Tweet, or where to find value in LinkedIn can usually turn to their companies, according to a LIMRA study.
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Six in 10 financial services companies have programs in place to assist their financial advisers and representatives with social media, LIMRA finds in a new study.

As the industry widens its outreach to consumers, support for advisers comes in a variety of shapes and sizes, with companies providing examples, guidelines, content and training, according to “Supporting Social Media,” which surveyed 36 financial services companies.

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“We already know that almost all financial services companies are using social media,” says Norah Denley, senior research analyst in distribution and technology research at LIMRA, and the report’s author. “This study reveals the extent to which companies are helping their advisers and representatives capitalize on their social media presence and engage in best practices.”

In addition to training and content for advisers, three factors—executive buy-in, internal training, and awareness—are critical to success in using social media, according to the report.

Executives need to support the necessary financial and staffing resources, Denley says. “Compliance and sales teams should be users of social media in addition to knowing how it works,” she says. Home office staff must aware of their company’s social media programs to better understand their potential.

Financial services firms do have some challenges, according to the report. In addition to lack of knowledge, the most common impediments are a shortage of content and slow review processes for content, the study found.

Advisers who are frustrated by a content shortage can use what is currently available and let their firms know they’re interested in more, Denley suggests. “It depends on the advisers and the relationship with their companies,” she tells PLANADVISER. Adviser support staffs for social media tend to be lean, Denley says, and they are trying to do their best with limited resources.

“Provide constructive direction,” she says, and keep in mind that some organizations allow advisers to create their own content, a strategy that should be checked into. “It might take a few days to get approval for content, but the more you work with them the better they understand you,” Denley says.

In the beginning, created content may have to pass through a lot of hands, making the content less timely, which Denley says is the current reality of communicating in a lightning-fast medium when you’re in a highly regulated industry. “It comes down to communicating with your company.”

Considerable Rewards

The reach of social media is considerable, Denley says, and it’s not just Millennials and younger demographics who prefer shorter, online communication. “It’s really about convenience, both for the consumer and the adviser,” she notes. “Younger consumers and consumers in general are busy. Younger consumers might not be as familiar with finance planners, and could be less interested in a phone chat or sit-down.”

Social media could be a good way for these consumers to get a feel for an adviser. Many people research financial purchases online before making a decision, and social media use can help an adviser build trust through social media messaging and communication, Denley says.

The point is to provide value. “If you’re talking to your clients or prospects, what are the things you’d be telling them?” Denley asks. “It’s not about selling: it’s about providing value and useful, interesting things they want to know, from a change in the tax code to information that might help them if they are having a child.”

Some sites can be useful research tools while the adviser keeps in touch and builds trust. “Instead of waiting once a year for the annual phone call,” Denley says, “advisers can send out messages applicable to more than one person. It could be a great convenience, and a great way to stay top of mind.”

Denley notes that social media is a long-term strategy. “Because it’s a social tool, it’s about relationships and communicating, which is a skill that most advisers have anyway. Training simply helps them convert those skills for use in a modern medium.”

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