Tired of seeing articles from big financial media outlets bashing Millennials and their money habits? Yeah, me too. The truth is, Gen Y really isn’t that bad with finances. In fact, our money habits seem more in line with the Great Depression generation than the Baby Boomers.
We aren’t frivolous spenders and we don’t shy away from frugality. We tend to seek out the lowest prices on the things we want to purchase, and we do a good job of prioritizing our relationships and experiences over buying material stuff. And our age group is the most likely to have a few months’ worth of expenses saved in an emergency fund.
That being said, Millennials aren’t the perfect examples of financially literate individuals. Collectively, we still have a lot to learn – as evidenced by the fact that, while we’re excellent at saving money in cash, we’re terrible at investing.
If you don’t know why that’s a problem, that underlines the point here. We need some financial direction and education. The good news is that we are willing to learn, but many of us seem to be diehard do-it-yourselfers. We don’t want to reach out for professional financial advice. But why?
According to a study released by Wells Fargo, the answer is that many Millennials believe they can’t afford financial planning. 55% of the survey’s Gen Y respondents said they didn’t think they had enough money to work with a financial advisor.
Millennials Can Afford Professional Financial Advice
Yikes! Those findings aren’t good, because it shows there’s a big lack of understanding about the financial planning industry. While the idea that professional financial advice was only for old people who were already wealthy may have been true at one time, we’re living in a new reality now.
There are plenty of valuable resources for Millennials who need help with their finances – and they’re provided by financial advisors and planners who believe you don’t need to be rich to deserve help with your money.
Why Fee-Only Financial Planning Makes Sense for Gen Y
So what changed? Why is a financial advisor suddenly something Millennials can afford?
In the past, financial advisors got paid for things other than actually helping clients by providing actionable, personalized advice. Instead, they earned a living by pushing products they earned commissions on (like insurance) or by “actively” managing investment accounts.
Old-school advisors also required their clients have a certain amount in assets before even agreeing to work with them. Often, this was something like half a million dollars. No wonder the common misconception is that you have to have money to get help with your money!
That’s changing, and it’s happening right now. There’s a big shift occurring in the industry, where more and more young financial planners are interested in working with their peers (that’s you!) to provide financial planning – not to push expensive insurance and investment products onto people who don’t need either.
(Oh, and they don’t care how much you have in the bank, or don’t have. They want to help you make smart decisions and reach your financial goals regardless of what your net worth looks like.)
Millennials can work with fee-only financial planners for the same cost as what they’re paying for monthly cell phone service. The payment system looks similar to your other bills, too. Fee-only advisors work on a monthly retainer model, meaning you play a flat monthly rate for their advice, knowledge, analysis, and recommendations for financial success.