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Millennials are the next wave of clients, says a demographer, so forget about their much-maligned breakfast habits!
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Why accountants should learn to love the smashed avo generation
09 November 2022
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12 minute read
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Accountants are being urged to embrace the Millennial client base and show them a little love by the director of advisory at McCrindle Research Ashley Fell, ahead of the upcoming Accountants Daily Strategy Day 2022.
With the 2021 Census revealing that the population of Millennials has drawn level with baby boomers, it is a demographic that accountants cannot ignore.
She said a good place to start would be to understand the challenges unique to them, including the disparity between wages growth and property price growth, rising inflation and interest rates, and growing cost-of-living pressures, she suggested.
“People have lots of different reasons why they think Millennials can’t get into the housing market for example, including their love for smashed avos, but it’s much more complex than that,” Ms Fell told Accountants Daily.
“Jokes are great but we’ve got to make sure that we respect the context they have grown up in.”
At the Accountants Daily Strategy Day 2022, Ms Fell will unpack the secrets of the latest census data and paint a picture of what the next generation of accounting clients look like, how technology is changing client expectations and behaviour, and the impact of intergenerational wealth transfer.
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The census data revealed that baby boomers and Millennials each have over 5.4 million people in Australia. However, over the last 10 years, Millennials have increased from 20.4 per cent of the population in 2011 to 21.5 per cent in 2021 while baby boomers have decreased from 25.4 per cent to 21.5 per cent.
McCrindle Research also highlighted the unique cost pressures Millennials face.
Australians earned less than $10,000 in the first year of the Millennials’ birth in 1981, today’s average annual earnings exceed $90,000, but costs have spiked too.
Most renters paid less than $59 per week in rent four decades ago compared to $375 now and mortgages have increased from under $300 to now more than $1,863.
While a ninefold increase in earnings should compensate for a sixfold increase in housing, Millennials face additional non-housing costs not borne by previous generations such as childcare, private health and education expenses, internet and subscription costs, and transport costs such as tolls and leases.
“All of this can definitely be disheartening to this whole generation when they’re trying to start early and build their wealth and assets over time,” Ms Fell said.
Accommodating for this demographic shift and tailoring their services would benefit both accountants and their clients, Ms Fell said.
“I think that when accountants are engaging with this generation, it is important for them to be aware of the context and pain points,” she said.
“We’re not discounting Baby Boomers in any way. In fact, we know that the Baby Boomers currently hold more than half of Australia’s wealth even though they comprise less than a quarter of the population, so they’ve got a lot of power.
“But as they continue to transition out of the workforce and retire, and subsequently downsize their homes, we will see that wealth being transferred to emerging generations.”
An accountant’s role is to guide their clients through this intergenerational wealth transfer and ensure that the older generation leaves a legacy for emerging generations, Ms Fell said.
“If accountants can help them transfer that wealth while having an impact with the wealth that they have accumulated over the course of their life, that will make the client believe they are getting so much value out of their relationship with their accountant,” she said.
Ms Fell concluded that post-pandemic, clients want accountants to use technological tools and online services for simple transactions, but offer face-to-face advice for complex advice on wealth building and wealth transfer.
“There’s a place for that face-to-face relationship and trust building, especially when we're talking about someone's wealth and assets, which they would have worked hard for their whole life,” Ms Fell said.
To hear more from Ashley Fell on how to provide tailored advice to the Millennials and baby boomers and how the changing demographic could alter Australia’s tax landscape, come along to the Accountants Daily Strategy Day 2022.
It will take place on 29 November at Grand Hyatt, Melbourne, and 1 December at Parkroyal Parramatta in Sydney.
Click here to book your tickets and make sure you don’t miss out!
For more information about the conference, including speakers and agenda, click here.
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