The earlier we start investing the better. However, most young professionals today prefer to spend rather than save. In fact, many advisors find it difficult to convince this demographic to become their clients.
Bharat Bhagla of Beas Network says, “The biggest challenge with young professionals is that they lack foresight. Since they have just started their careers, they like spending their income on things that catch their fancy, like an iPhone 7 or luxury bike or a foreign holiday. They do not want to talk about investments.”
So how can advisors get them interested in investing?
“The key lies in not stopping them from spending. Instead of stopping the client from spending on trifles, try to divest his spending towards medium to long-term goals. Start conversations with when do you plan on buying your own car? Or what does your dream house look like? This way you can convince him to start a small SIP each month,” says Amol Joshi of Plan Rupee
Dhruv Mehta emphasizes the impact of peer pressure. He says that most investors in this demographic start investing after seeing their colleagues do the same. “An ideal way to meet and on-board young professionals is by conducting IAPs or workshops at companies. If one of your clients is an employee of the same company, quote his example. This will inspire more people to start investing,” says Dhruv
Another challenge for advisors is the attachment most young professionals show to technology. Being tech savvy themselves, young professionals prefer tech-savvy advisors. “The only way to overcome this challenge is by familiarizing yourself with technology. Talk to your clients; ask them how you can improve their client experience. Note down their suggestions and work towards it,” says Bharat Bhagla.
Apart from this, young professionals also need a lot of handholding to ensure they do not deviate from their goals. By regularly talking with the client and showing him the power of compounding, advisors can slowly mould his behaviour.
Advisors play a crucial role in rightly moulding and securing the financial future of young professionals. By convincing them to start investing early, advisors can help them accumulate wealth and reach their financial goals faster and more easily.