The cover star of this month’s Teen Vogue is the 16-year old Swedish school girl activist Greta Thunberg, urging people to join the Global Climate strike. On Friday people will start walking out of their offices and classrooms to push governments and corporations to address the climate crisis. There is a momentum building over the urgent need to act for the environment and a lot of it is driven by young people worried about what their futures will look like.
There is, I think, a parallel to be drawn with changing attitudes to money and financial services, too. Millennials and Generation Z are fearful of how they will afford to look after themselves in the decades to come as they face the perfect storm of impossibly expensive housing, student loan repayments and fears over whether company pensions will offer anywhere near enough to retire.
if you want to attract younger customers, start to talk their language. Make your communications transparent, explain how your products work in layman’s terms, and show you really care about both your customer’s future and the future of the planet.
There is also heavy scepticism of big corporations, banks and financial services companies, among twenty and thirty-somethings who have only ever known an adult, working life since the financial crisis and who feel mainstream capitalism has not been beneficial to them.
Why should we trust banks that precipitated a recession we’re still, more than any other age group, suffering from? Salaries of those now in their thirties are 7 per cent below where they were before the financial crisis, found a study by the Resolution Foundation earlier this year, while those of over 50s have recovered to above the wages seen a decade ago.
I get asked a lot: “how can I do something better with my money? How can I support responsible capitalism?”
Now, more than ever, people want the companies that provide them with bank accounts or savings products, to show evidence that they are doing something positive with the profit that they make, as well as evidence that they foster more ethical work practices. Big businesses need to pay enough tax, they need to employ a diverse workforce, and they need to operate in a transparent and responsible way to win over the loyalty of a new generation of customers.
Read the Good Guide to Pensions, by Good With Money
Return on our savings is important as we worry about how to afford the rising cost of living, but I think there is a sense that return should not be sought at the expense of other people and the planet. There’s also belief that the two aren’t mutually exclusive because companies that treat their staff well, offer flexible parenthood policies, for example, or invest in the environment, will be more sustainable and profitable in the long term.
There’s a problem, though, and that is that lots of people, millennials in particular, are woefully lacking in financial education and as a consequence, don’t know where to start with supporting the financial companies they use to make more of a positive impact.
At a recent conference a pension fund trustee told me that, contrary to belief, when he introduced an ethical pension scheme, it didn’t prove any more popular with young employees.
My guess is not that this proves young employees don’t care about investing ethically, but more likely they don’t really understand investing at all. An industry so laden with jargon is alienating those who didn’t learn about personal finance at school and as a result they are not able to make clear-eyed choices about what financial products to go for or how to vote with their feet.
How many twenty-somethings really understand where their pension is invested? Many have a pension through work because they have been automatically enrolled into it and know little beyond that. But many would be horrified to learn that a significant chunk of their salary is going, via their pension savings, towards supporting businesses that do not align with their principles, those that manufacture guns, for example, churn out plastic products or burn fossil fuels.
So in a week where the climate will be pushed back onto the agenda a call out to financial services companies: if you want to attract younger customers, start to talk their language. Make your communications transparent, explain how your products work in layman’s terms, and show you really care about both your customer’s future and the future of the planet.
