How to Best Advise Younger Clients through COVID-19

How to Best Advise Younger Clients through COVID-19

November 10th, 2020 · 3 min read

Your practice will rely on younger generations. Younger clients are looking for advice post-COVID-19 pandemonium. They worry about family, health, safety, loved ones, and financial security. As a financial advisor, this is an opportunity to reach young investors and turn them into lifelong clients. According to, nearly half of Americans ages 18-34 are looking for guidance from financial advisors more than they ever have. The Retirement Institute Survey of American stated that four in 10 adults 18 and older, with investable assets of $100,000 or more, have reached out to financial advisors for the first time in their lives.

Not the First Time

These clients have been through a lot of financial hardships. They are survivors. They outlived the Crash of 2008 and have strong memories of how the Great Recession affected market risk. Most of them live with enormous student loan debt, the kind that has dictated life decisions for them. This generation chose work and finances over buying their first home, financial development over starting families. Now they are facing yet another worry, COVID-19 and job security. We are at the highest level of unemployment since the Great Depression, and portfolios are changing. This recession is full of volatility, a potential bear market, and who knows what else. COVID-19 isn’t the first time these investors have lived through a “once in a lifetime” event like this. They are scared.

Out of Nowhere

We went from Christmas to New Years to COVID-19. In a matter of months, the entire world was in a full-blown epidemic based panic. Anyone between the ages of 18-34 feels out of control, and most are looking for financial guidance. The majority (74%) have stated that if they do everything correctly to manage finances and investments, they believe they could get hit out of nowhere again. More than two-thirds (67%) are aggressively trying to find help to manage their finances and investment to guarantee their futures. A mere 10% said that they aren’t worried about how COVID-19 will impact their financial obligations. The point, the majority of Americans need advice from financial advisors.

Not the Best Choices

With all of the mayhem of the pandemic, the younger clients aren’t always going to make great choices. Americans 18-34 are more likely than all American adults to make adverse actions such as: • Delay paying their bills (32% vs. 24%) • Increase credit card debt (23% vs. 18%) • Stop paying bills (15% vs. 10%) • Take out loans against qualified retirement plans (15% vs. 11%) • Pull from non-qualified investments (10% vs. 7%) • Risk long-term losses by selling shares of qualified retirement plans (13% vs. 10%) • Decrease contributions to qualified retirement savings plans (15% vs. 10%) • Take money out of stocks, mutual funds, and EFT’s (15% vs. 10%) The 18-34-year-olds need financial advisors’ advice to develop long-term strategies that they can stick to and count on.

What about Protection?

We hit the worst decline since the 1987’s Black Monday crash. While portfolios have bounced back, there is still a ton of concerns around volatility. Our younger American’s are leading with thoughts about financial protection. These young investors see the need for annuities to protect their assets and retirement income against market risk. Americans 18-34 seek life insurance, long-term care insurance, and other caregiving responsibilities for members of their families.

Building Trust

Trust should be the first thing a financial advisor or financial firm aims to establish with old and new clients alike. Those 18-34 have had an awakening and reprioritized family and friends as being just as important as income and career. It is essential to maintain strong relationships with clients and treat them like family. An advisor needs to know how to connect epenthetically with their clients. Clients are looking to connect with your expertise, feel heard, and understood.

You, Your Clients, and Protection Remember, more than 30 trillion dollars is circulating, and this generation is ready to inherit their share. This generation is educated more than any other that came before them. They understand trends, how to adapt to changes, technology, pandemics, and how fast things can go awry. They are adaptive and out there looking for long-term relationships with like-minded financial advisors.