A Generation at Risk? Young Professionals in the 21st Century

Executive Summary

Advisers have an enormous opportunity to focus on a group that constitutes approximately one-sixth of all Americans: the 53 million born between 1981 and 1992. Of this cohort, nearly 15 million have incomes of more than $100,000 per year. Many of these individuals, however, are not adequately protecting their present and future wealth from mitigable risks. In fact, the 36 percent of young professionals who are living in the family home may also be exposing their high-net-worth parents to such risks.

A Generation at Risk?
Young Professionals in the 21st Century

• Many use technology without appreciating its potential perils. They make up a large group of complainants to governmental authorities about identity theft, and because of their heavy use of social media, they are at a greater risk of being accused of defamation for a careless statement online.
• They face risk when traveling, with potentially disastrous costs in case of a mishap. Yet, according to surveys, they often fail to procure travel insurance in spite of its low cost and easy availability.
• Their enthusiastic participation in the so-called sharing economy exposes them to potential liability for personal injury, loss of property and regulatory penalties.
• They face a variety of litigation risks, yet the vast majority fails to procure sufficient excess liability coverage, leaving themselves exposed to significant damage awards.
• They fail to procure other important coverages unless they are compelled to do so; for example, 60 percent of those who rent do not have renters’ insurance.
• Those who live at home may fail to appreciate the potential liability to which they expose their parents, including personal injury, property damage, and auto accident liability—as may the parents themselves.
• A large number are skeptical about the need for trusted advisers; a study by Merrill Lynch reported that 41 percent do not have an adviser of any kind. Hence, many emerging wealthy professionals unknowingly have placed their present and future wealth at risk. This presents an enormous opportunity for trusted advisers to act.
• As the baby boomers die off, these young professionals will become the largest cohort in the population. Advisers who seek their trust will not only increase their business now but also have a stronger client base in the future. This white paper explains advisers’ opportunities to provide emerging wealthy professionals with the counsel, risk management advice and insurance instruction they need.