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Selling life insurance to millennials… what is different?

01 June 2015 Bev van Nijkerk, Sanlam

The biggest task for a financial adviser who wants to market products to millennials – those born after 1980s - is to gain their trust, says Bev van Nijkerk, Segment Specialist at Sanlam.

The good news is that this generation is not averse to financial planners, even if many of them are sceptical about financial institutions.

A new kind of client

Their place in society is either at universities, just entering the job market or just settling into a stable job. They own smartphones, make online purchases and they smear brands that do not meet their high expectations on the social media.

When it comes to finances, they plan for the short-term and, generally, find the phrase financial plan foreign. Marketing anything to millennials is keeping marketing strategists of different industries on their toes.

They are a generation that does not want to be bombarded with advertisements. They want to buy fast and move on. Their two other two important traits are their civic-mindedness and brand loyalty. They want to know that you care about the well-being of their community and they are loyal to those who pay attention to their specific needs.

This presents unique but focused opportunities to financial advisers.

Serve your outcomes

Understanding millennials well will serve your outcomes. They need to know that you are genuinely interested in them.

Demonstrate your interest in them and their dreams before you even think about selling products.

Build a relationship. Nothing will happen if you walk into the door, introduce yourself and expect some level of trust and a couple of sales.

In its latest Retirement Benchmark Survey, Sanlam, interviewed millennials aged 23 to 35 who are financial decision-makers (at least jointly) within their households.

The findings showed that while they consider themselves penny-wise. Generation Y is a generation of spenders and their short-term spending behaviour is both emotional and spontaneous. Debt is their main concern.

It is imperative that financial advisers first connect with the debt problems faced by this generation.

Regardless of your sales objective, your starting point should be to make the millennials aware of where they spend their money by making sure that they work according to a budget. From there, they can better see where to cut to make way for paying off debt and to save. In this way, you would have demonstrated what a financial plan means, and it will be easier to take the conversation forward.

Demystify financial planning

Advisers need to demystify the concept of financial planning to this age group. They need to make sure that it is understood as a tool to keep clients financially independent, no matter what life events happen to them.

Millennials must understand that financial planning boils down to protecting themselves against disasters, because no one is immune to disasters. Once you have achieved this, the next step is to understand their goals and dreams.

The needs of millennials differ from those of the average married person with two children. Their goals and their dreams are their biggest focus. A millennial who wants to start a company is probably not interested in life cover. They will buy insurance if it ties into their goals. As an adviser, you have to demonstrate how insurance such as income protection cover fits into their bigger picture. They buy cutting edge products but, at the same time, they don’t want complexity.

Simplicity is a game changer

Products aimed at this age group must be simple, understandable but most importantly, they must be relevant.

Millennials hate being bamboozled into something. If they buy something that they do not understand, the products will simply lapse. Worse yet, another adviser will redirect the policy and the client will allow it to happen because he has no real understanding of why he bought it in the first place.

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