Young investors missing out as average age of new pension client is over 41, survey reveals

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Written by Ray Clancy

Monday, 01 February 2010 09:57

Young investors are routinely missing out on opportunities as financial advisers fail to engage with them, according to a new survey.

Despite almost 70% of financial managers saying that those aged 28 to 40 are important to their business they often do now start working with clients until they are aged over 40, the research from financial giant Standard Life shows.

Some 69% of advisers said that young people are important because they offer long term business prospects which aid sustainability. Yet the average age of new clients is 41 to 45 years of age.

Encouragingly, advisers build long term client relationships with the average lasting typically year, rising to more than 15 years for one in eight advisers, the survey also shows.

Mark Polson, head of customer management at Standard Life, says young people often recognise the need to save for retirement but many are reluctant to take the first steps. He believes advisers have a major role to play in helping them understand the importance of long term saving.

Also Standard Life says many advisers have ageing client banks and need to balance their attention between customers who are wealthy now and those who will be wealthy in the future.

‘Advisers know that at the heart of a successful business is a successful client base. As client bases age, advisers need a balance of those who are wealthy now and those who will be wealthy in the future. However, younger clients are not easy to find and not necessarily receptive when you do find them,’ said Polson.

‘The question is, do advisers have the right tools to target this generation? From our insight, we know that the majority of younger people know a pension is a good way to save, yet at the moment they don’t believe it can fit their lifestyle and be as flexible as they need,’ added Polson.

Standard Life is now implementing policies to encourage younger investors. ‘To overcome this and help advisers reach this market we have put in a huge amount of work to understand and develop a proposition which we think will resonate with these clients of the future and look forward to working with advisers to help build their businesses,’ added Polson.

As part of the campaign behind its new active money personal pension, Standard Life will be advertising on Dave TV, a digital television channel aimed at a young audience. The campaign will focus on the need to evaluate long-term financial planning, and urge consumers to seek professional advice.

It comprises the AMPP, active money SIPP and later in the year will include an active money specialist SIPP. Clients only pay for the features they need with the option to switch on more sophisticated features later in life.