Who is shaping your younger clients’ pension decisions before you meet them?

The next generation of advice clients may already know where their pension is invested. They may also have firm views on UK equities, sustainable funds and something a finfluencer explained between adverts for protein powder. Whether every investment change represents wisdom rather than enthusiasm is a separate question.

Research from Pensions UK points to a widening generational divide in pension engagement. Some 31 per cent of 18 to 34-year-olds said they knew what their pension was invested in, compared with 21 per cent of those aged 35 to 54. Younger adults were also more likely to have changed their investment options: 21 per cent had done so, against 12 per cent of middle-aged savers.

The enthusiasm extends to domestic investment. Among younger savers, 22 per cent said they would prefer UK investments even if the returns were lower, compared with 13 per cent among older groups. Sacrificing returns for patriotism is certainly an investment philosophy. Advisers may wish to explore it carefully before adding it to the suitability report.

The findings come from independent online research conducted in February among a nationally representative sample of 1,567 UK adults aged 18 and over who had not retired. They suggest younger savers are paying more attention to their pensions, which is encouraging, although self-reported knowledge deserves the usual health warning.

Knowing the fund name isn’t the same as understanding it

Knowing where a pension is invested should improve the advice conversation. It may also expose any adviser whose value proposition depended on being the only person in the meeting who knew the fund name. But recognition isn’t understanding: clients still need to know what the fund holds, what it costs, how much risk it carries and why it belongs in their portfolio.

Changing an investment demonstrates activity rather more reliably than judgement. A younger client may arrive with stronger views than previous generations, but those views could have been shaped by an app, an online community or somebody speaking with immense confidence into a ring light. Some financial content is excellent. Some is mainly excellent at attracting views.

That changes the adviser’s role rather than diminishing it. Younger clients may need less encouragement to engage with their pensions and more help testing the information they’ve already collected. Dismissing their research will achieve little; showing where enthusiasm, risk and long-term planning part company is rather more useful.

The opportunity is to meet that curiosity with proper analysis. If younger savers already care where their money is invested, advisers don’t need to manufacture engagement. They need to turn it into better decisions.