Financial Planning for Youth

I was listening to CBC “Spark” this week, and heard about some innovations in the school classroom that got me thinking about the challenges advisors have in engaging today’s youth and teaching them good financial planning lessons. In many cases, advisors focus on their clients’ financial needs, but have difficulty reaching their clients’ kids because the children (some of whom may be in their late teens or twenties) are not interested in the financial planning process and have no basis for trusting the advisor since they have no relationship of their own (it’s sort of like seeing your parent’s doctor). The risk to advisors who are unable to bridge that relationship gap is that the children will move the assets when their parents are out of the picture.

Our kids just aren’t saving their money. Combined with a backdrop of insufficient CPP and OAS to support us in our retirement, the low personal savings rate in Canada, a proliferation of credit, historically low interest rates and increasing tuition costs, young people need to be brought into the financial planning discussion.

A mobile tool called Class Dojo is being used by more than 50 million teachers, students and parents around the world to better engage students in the classroom discussion and to encourage positive behaviour. There is a fun, game-like attraction to the tool whereby students can see their results in real time and parents can also participate remotely. There are parallels to the financial planning workshops hosted by thousands of advisors every evening around the world. There must be an opportunity to increase engagement levels with a younger audience by better utilizing technology and speaking in terms more relevant to this demographic.

Another technology innovation affecting the classroom is the advent of “Cyber Days”. I grew up in Montreal where we could count on 2-3 snow days each winter. On those days, we would listen intently to the long list of school closures rhymed off on the radio and we would then phone our friends and make immediate plans to go tobogganing for the day at the closest park. This is changing as schools are notifying parents via email and in some cases directing students to a web site where they can access the day’s lesson and once homework is completed, submit the assignment online.

While some student would describe this as a buzz-kill, apparently others quite like completing their day’s assignment in their PJ’s, on their own time and without falling behind in the course. Again, some schools and their teachers are figuring out how to reach and engage their students just as dealerships and their advisors strive to connect with young people in an evolving financial and technology landscape. Those advisors who can connect with these young people will provide a much better service and be infinitely more successful.