Your clients are thrilled because this fall those 529 Plans are finally going to good use! The summer before entering college is an exciting, hectic, and nerve-wracking time for both parents and students. As a financial advisor for the entire family, you can play an integral role in this process, and create a vital foundation of money mindfulness.
- College life has unique, confusing budgeting circumstances. She’s not living at home, but Mom and Dad still pay the rent and grocery bills. His part-time job covers pizza and nights out, but what about new clothes? You can help families determine a fair and feasible budgeting strategy…and help them avoid a few awkward phone calls.
- College students are completely clueless about finances. LendEdu and others have surveyed college students’ knowledge of credit, savings, loans, and investment. For all their education, what do these bright young adults know about money management? Not much. In fact, 59% gave themselves a C- or worse when grading themselves on financial literacy1. In the school of life, this is a class that they will need to pass.
- Decisions about loans in college can haunt students forever. As you already know, America is in a student debt crisis. Americans owe more than $1.4 trillion in student loans2, which has probably increased since typing that sentence. This debt cripples our economy, and Americans’ quality of life. Fortunately, you can help college students secure their financial future by helping them make smart loan decisions now.
- Credit card companies target vulnerable college students. When you’re 18, $5,000 in credit sounds like free money. Credit card companies take advantage of these students by advertising on college campuses, and offering unbelievable benefits for students who sign up immediately. Students are pressured to sign up quickly, and are often tempted to use the credit when they are low on cash.
- They can become your clients. In the beginning, you might only be Mom and Dad’s money manager. However, as students realize the incredible benefit of financial planning, you can become their first stop for all of their finances. Given that $40 trillion will be inherited by 20503, it is critical to build relationships that will help you serve America’s next generation of investors.
1 “2016 College Students And Personal Finance Study;” Dave Rathmanner; May 26, 2016; LendEdu: Article Link 1
2 “A Look at the Shocking Student Loan Debt Statistics for 2017,” Updated May 8, 2017, Student Loan Hero: Article Link 2
3 “How Advisors Can Stop Losing Clients’ Heirs as Clients;” March 1, 2016; Jane Wollman Rusoff; ThinkAdvisor: Article Link