Young Adults and Financial Matters – Two Worlds Apart?
A baseline study of young adults’ financial literacy.
The Allianz Insurance Group and their media partner, the German newspaper Welt am Sonntag, wanted to find a way to overcome young adults’ reluctance to plan for their financial future.
“Retirement” – it sounds like something in the distant future, doesn’t it? This is one of the reasons behind many young adults’ lackluster attitude toward planning for their retirement, even though they in general say that financial issues are very important to them.
So how can financial-service providers reach out to young people about retirement insurance? Our client’s hypothesis was that maybe young people could first be interested in non-retirement-related investment products, and then later approached about pension funds once they were already established customers.
To find answers to these questions, GIM designed and carried out a three-step study tailored to the everyday lives of the target group (young adults between ages 16 and 24).
The study’s three steps were:
- In-home interviews
We carried out in-person interviews to learn about respondents’ goals in life, financial goals, as well as their motives for and barriers keeping them from reaching these financial goals. Surprisingly, the majority of respondents have very traditional goals – both in life and in financial matters – including beginning a career, starting a family and purchasing a home. Despite their pragmatic goals, however, these young adults lack the same pragmatism when it comes to their actions (which from our client’s point of view would mean investing in financial products).
- Online research tasks
Respondents were asked to search the internet for information, and to keep a journal in which they made note of which sites they found particularly helpful and which ones they found off-putting. A list of these sites was compiled on the GIM online platform, where respondents were also invited to discuss each other’s choices.
- Follow-up phone interviews
We called respondents on the phone and asked them about their experiences with and insights gained from the online exercises in the second step.
We found that customers find financial and insurance products particularly appealing if they feel that these products are tailored to their individual stage in life and to the decisions they are currently faced with. Retirement planning should not remind people of old age, but should instead communicate the more neutral or positive message of “putting some money aside for later”. The target group responded much better to product information that made specific reference to their job – and thus to the fact that they were able to put aside some of their earnings for the future – than they did to general product information that did not mention their work.
Further information on this study can be found in various Welt am Sonntag articles, on the market-research portal Planung und Analyse, and on our website.