More than half of UK young adults have stated they feel they have little to no control over their future finances according to new research by Invessed.
The new survey, conducted in association with YouGov, found alarming thoughts of young British people when it pertains to investing in their futures, with engagement and seeking advice from older wealth management firms being primary factors.
According to the research, which surveyed over 2,000 adults above the age of 18 from 29 February – 1 March 2024, found that 56% of young investors are unlikely to seek professional advice due to prohibitive fees and old-fashioned practices.
Due to the lingering effects of the cost-of-living crisis and coming out of a period of recession, young people are becoming less optimistic regarding their future financial prospects.
This is indicative of the 47% of respondents stating that they save nothing or too little of their regular income. Invessed stated that younger British adults are seeking updated wealth management and savings advice tailored to not just their needs, but to adapt to the current economic climate.
Female respondents showed more concerns than their male counterparts, with 63% revealing they don’t feel comfortable with basic investment principles. A further 73% admitted they don’t actively monitor their investments.
Speaking on the survey, Theo Paraskevolpoulos, CEO and Founder of Invessed, commented: “Our Client Engagement Survey underlines the attitudes of Generation X, Millennials and Generation Z towards their financial future, showing their discomfort with investment principles and their lack of active investment monitoring.
“Wealth advisors must respond to the issues raised by this survey and find new ways to connect more effectively with this demographic. If not, they risk losing their grip on this potential future client base.
Financial literacy amongst young people was raised as being one of the primary concerns over the next five years.
Within this demographic, more education on low savings, poor investment habits and infrequent monitoring of active investments were cited as key areas for improvement.
Moreover, the survey highlights high fees and a preference to personally manage finances currently deters younger investors from seeking professional investment advice.
With an estimated $84trn generational wealth transfer in process from Baby Boomers, wealth advisors must find new ways to engage with younger investors, Invessed stated, as this effort would also benefit from the inclusion of targeted education and support designed to increase comfort and understanding of investment principles.
“If the Asset and Wealth Management sector continues to deter younger investors, the consequences could be felt by us all,” continued Paraskevolpoulos.
“This issue could further exacerbate an already growing generational gap in key economic areas. It’s essential that younger investors can benefit from professional support to build and manage wealth, but this won’t happen if those in the sector continue with outdated practices.
“Our research highlights the futility of current approaches and should come as a wake-up call to the sector.”
