Estate Planning, Financial Planning, Insurance, Millennials

Neglected Areas of Millennials’ Financial Plans


Quick, what’s the first topic you think of when you hear “Financial Advisor”?

Investments? Retirement?

It’s not uncommon to meet with a new client, and the first topic of conversation is the stock market, their investments, or something related to retirement planning. While I spend a significant part of my time analyzing investments and developing retirement plans, those are not the only areas that I address in my clients’ financial plans.  If your “financial advisor” has ONLY been providing advice on investments, then you do not have a financial advisor. You have an investment advisor. And there is a good chance that there are some important areas of your financial life that have been neglected.

Estate Planning

Estate planning isn’t just for your parents and grandparents. While the Boomers are planning to pass assets to heirs, millennials should be planning for the care of their young children should the unthinkable happen–I wrote about this in a previous blog, Before You Start Your Newborn’s 529 Plan. Not only should millennials have the proper estate planning documents to address the care of their children, but they should also have a healthcare power of attorney and living will. These documents are invaluable if you are unable to make healthcare decisions–the living will doesn’t require a loved one to make a difficult decision regarding life and death because it has already been determined–by you. I get it–no one wants to talk about death, but it is critical to plan for the worst. Hopefully, it never happens, but it’s best to protect your family in case it does.

Life Insurance

Just like estate planning, life insurance is a topic that most people will skip, if given the opportunity. Unlike estate planning, I know you are aware of life insurance. As a millennial, you’ve been pitched life insurance before. We all know someone who entered the insurance industry, and in their struggle to earn a paycheck, called everyone they knew to try and sell them life insurance. Full disclosure, I’ve been there–I started my career in an insurance based firm. I didn’t stay long. During their pitch, you were probably introduced to whole life insurance, which not only protected your family if you died, but it also had an investment component; don’t worry, I’m not going to go into if life insurance is an investment, or not–that will come. For most millennials, inexpensive term insurance is going to be the best option, but there may be some who will benefit from the more expensive whole life insurance policy. There is a lot to consider when determining the type of life insurance and amount of coverage: college funding, income replacement, debt payoff, etc. Don’t avoid protecting your family from financial strain because you don’t want to discuss death. Your financial advisor should be able to help you analyze how much coverage and the type of insurance you need. Whatever you do, don’t delay the conversation surrounding life insurance.

Disability Insurance

Yet another insurance. Yet another life experience we hope to avoid…disability. As a young professional, your most valuable asset is your earnings potential, and a disability impacting your ability to earn may not be as dramatic as what you think. I’ve seen a radiologist unable to perform his job because he had a condition that caused him to continuously shake. Looking at him, you wouldn’t have said he was disabled, but he was not able to perform the day to day activities his job required, and without a disability insurance policy, he would have been without income until his symptoms subdued. Because of the complexity of disability insurance, you should consult a financial advisor to help you evaluate if disability insurance is needed, and what type of coverage is best for your situation.

Debt Management

The average student loan balance is $29,000, and it continues to rise each year. In addition to student loans, millennials have mortgages, car loans, and sometimes, the unfortunate credit card debt. It’s hard to start accumulating wealth when you are saddled with debt. A financial advisor should help you develop a plan for paying down your debt, while also beginning to save money. Yes, you can pay down debt and save at the the same time. In addition, a financial advisor can help you use debt responsibly…not all debt is bad.

I understand why most financial advisors neglect estate planning, life insurance, disability insurance and debt management. These are sensitive topics, not to mention many advisors are trained for sales, not to be a planner. It’s easier to avoid the emotional conversations and head straight to the topic that everyone loves to discuss…investments and retirement. But, a financial advisor’s job is not to avoid the important parts of your financial plan. It’s your financial advisor’s responsibility to make sure that all aspects of your financial plan are addressed, not just the ones you want to talk about. If your financial advisor is not helping you evaluate the above areas of your financial plan, you may want to start looking for a new advisor. Finding a CERTIFIED FINANCIAL PLANNER™ professional is a good start.


Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimers page