In his recent Xerocon keynote, Xero’s chief marketing officer Andy Lark noted a compelling statistic: Seventy percent of the 600,000 start ups launched in The UK in 2015 were millennials in the 18-34 demographic.
There is a lot that’s been said about Millennials, their social and spiritual habits are topics of intense media attention. But for the purposes of this article, we’ll focus on the socio-economic aspects (the comment section is there for the other stuff). As PwC notes in its recent report ‘Millenials and financial literacy’, “[Millennials] are better educated than their predecessors, more ethnically diverse, and more economically active”.
Simultaneously, Millennials confront greater difficulties than previous generations, including economic uncertainty, student debt than those who came before them. “Millennials owe a lot. They know too little. Millennials’ struggle with debt may eventually become our problem, too,” according to Annamaria Lusardi, Academic Director of the global financial literacy excellence centre at the George Washington University.
From an accountants’ perspective, you have a new generation of client financially industrious entrepreneurs, screaming out for financial advice. In PwC’s report, just under a quarter (24%) indicated basic financial knowledge. “Millennials are the least financially literate among all age groups,” writes Terry Sheridan on AccountingWEB US. “They understood more about mortgages and ‘numeracy’ than inflation, diversification, and bond concepts.”
The generation that is financially burdened is also easily amazed and satisfied. Just by doing what accountants do best, something like day-to-day compliance and tax optimisation, a practitioner can gain a new, loyal client.
Meg Pope, a millennial and events manager/digital marketing consultant, typifies this experience. “For my first ever tax return this year, I was expecting to pay £4000,” she says. “But my accountant worked his magic and brought it down to £940.” For members of financially strained, debt burdened generation - a tax run-of-the-mill saving on tax is a welcome gift. “For what I saved, I would’ve gladly paid him more than the fee he ended charging me,” says Pope.
“Everyone pays <taxes>, but you can help minimize them,” says AccountingWEB columnist Bryce Sanders. “Teach them simple things like recording the mileage when using their car for work and tallying the costs of publications they buy connected to their field of expertise. Every deduction counts.”
Millennials need you
“The research has documented that the gap between the amount of financial responsibility given to young [people] and their demonstrated ability to manage financial decisions is rapidly widening,” the PwC study states.
“This ‘knowledge deficit’,” wrote Sheridan, “could be a personal, economical, and social disaster”.
Simply put millennials need accountants. But do accountants want to deal with clients that have been cast as “selfie-posting, social-media-crazed underachievers”? Well, to return to Andy Lark’s statistic - you don’t really have much of a choice.
And you should want millennial clients, too. Even for young people who aren’t start-up innovators, the ‘side hustle’ - or second job - has become the norm. As The New York Times quipped, “The forward slash…is evolving into a kind of identity marker (paralegal/actress; fashion publicist/D.J.; advertising executive/gluten free baker)”. And for many of these young people, with forward slashes in their professional identities, their ambition is to go into business for themselves eventually.
Now, all they need is an accountant.