Mention the term “gig workers” to most Americans and they are likely to envision an under-30 worker driving a car or a freelancer trying to make ends meet. That image isn’t entirely off base, but it’s also not entirely accurate.

According to a recent study by Pew Research, 39% of gig workers define the money they earn from a gig as “nice to have, but not needed”; in fact, the biggest reason that people cite for taking a gig job is to “save up extra money” (56%).¹

With an increasing number of gig platform workers and an ever-growing population of freelancers and independent contractors, advisors may be overlooking a substantial share of working Americans who are growing their own businesses, building wealth and in need of an advisor’s financial planning help.

Indeed, according to one estimate, the number of gig workers making $100,000 or more annually stands at 3.1 million.²

Opportunities for Financial Advisors

In some ways, financial advisors are very well positioned for tapping this niche since many of them already have practices targeted to helping small business owners navigate the myriad of business and personal planning challenges they face.

When considering the population of gig workers, there are several financial planning and investment needs that are immediately obvious:

• Retirement Planning—Like most Americans, gig workers need advice on crafting a disciplined saving and investment plan that will help them realize their future retirement goals.
• Risk Management—As self-employed entrepreneurs, gig workers need to be sure they have taken the necessary risk management steps to protect their businesses, themselves and their families against the wide range of liability, health and property loss risks they face.
• Budgeting—With variable income streams and the need to pay estimated taxes on a quarterly basis, budgeting services can be a powerful way to create value for this niche.

As with any niche, advisors will need to look at specialized forums and communities to identify gig worker prospects. Facebook and LinkedIn are two such ways. Another way is to connect with local communities of these workers and offer them free financial planning education.

Gig workers may be scattered and harder to identify than physicians or engineers, but that extra work may be rewarded by the fact that advisors will be swimming in less competitive and congested waters.

Sources:

1. https://www.pewresearch.org/internet/2021/12/08/the-state-of-gig-work-in-2021/
2. https://brodmin.com/case-studies/gig-economy-case-study/#:~:text=Gig%20Workers’%20Financials&text=In%20the%20US%2C%20the%20number,20%25%20of%20the%20workforce).

Please reference disclosures: https://blog.americanportfolios.com/disclosures/