Millennials are as unconfident in their ability to manage their finances as younger consumers and yet in the past two years 46% of 25-44 year olds have remortgaged without the guidance of a financial or mortgage adviser, Paymentshield has revealed.
In a YouGov survey commissioned by the general insurance provider, 12% of 25-44 year olds admitted to being “not at all” or “not very” confident in their financial management capabilities, essentially matching levels among 18-24 year olds (13%) – consumers typically considered the least experienced with financial products and services.
Despite millennials admitting poor confidence, only 52% of consumers aged 25-44 remortgaged via an adviser.
A significant proportion of millennials also admitted to poor understanding of the processes and language around remortgaging: only 66% of 25-44 year olds would read the conditions of a mortgage through before contract-signing, despite 37% admitting a “fairly” or “very” bad understanding of the whole mortgage process from beginning to end.
33% of the same age bracket also cited a lack of self-confidence in understanding the jargon used to explain financial products and services.
James Watson, sales director of Paymentshield, said: “The expectation may be that as we get older and gain experience with financial products and services, we become more knowledgeable and confident in managing our finances. Our research busts that myth, with significant comprehension and confidence gaps among 25-44 year olds.
“At present, this cohort risk being overlooked by advisers in preference for younger clients whose need for guidance may be more immediately apparent given their comparative lack of experience.
“We’re urging advisers to seriously consider the needs of this age cohort at remortgage, not least because they demonstrate the same lack of confidence in managing their finances as the UK’s youngest homebuyers. Advisers are ideally positioned to demystify confusing language, clarify any questions and ensure the policy suits the customer’s current needs.
“This is especially important given the skyrocketing number of people choosing to improve their homes rather than move over the past 18 months, resulting in greater remortgage volumes and changes in home insurance requirements.”
Paymentshield’s research also found that when asked to imagine remortgaging via an adviser, 38% of 25-44 year olds expressed while they wouldn’t expect it, they would be happy for an adviser to review their home insurance needs too.
Watson added: “These findings should spur advisers to proactively check their back book via Adviser Hub to see which customers are due a remortgage, and when doing so, to make a special effort not to overlook this millennial cohort; their receptiveness to an insurance review presents a great opportunity for advisers to boost their income and make themselves indispensable to customers by holistically servicing their needs.”
