Are Millennials transforming wealth management?

Read our latest blog to understand what Millennial investors want in the digital world

Are Millennials transforming wealth management?

The financial crash of 2008 and the decade of volatility that followed haven’t done the reputation of the finance sector any favours in the eyes of the public. This leaves asset and wealth managers with the task of restoring public trust in their organisations, particularly with Millennials, the generation still struggling to get a foot on the housing ladder and which will soon become the largest client group in the sector. Achieving this, however, could lead to a radical transformation in wealth management.

Understanding the Millennial mindset

To win back trust, asset and wealth managers need to better understand Millennial attitudes. More self-directed than older generations, they require direct control of their wealth and, being tech-savvy, want to use the latest technology to achieve this.

Millennials are also ethically assertive, supporting issues like minority rights and veganism, while fiercely opposing climate change and plastic pollution. It’s an assertiveness they take to the marketplace too. Only by adapting to these attitudes can wealth managers restore Millennials’ faith in the finance sector.

A generational division over money

When it comes to Millennials and money, this is a generation that, compared to their Baby Boomer parents, generally lack financial knowledge; a particular issue being that of Millennials and wealth planning. Organisations wanting to increase trust can do this by providing financial guidance for Millennials. This, however, needs to be done in a way that suits how Millennials save and invest. It should be personalised around the needs of individual clients, using data to deliver the most relevant information and at the most appropriate time.

How that guidance is communicated is also important. Ideally, it should be available in the format of their choice and delivered through their preferred channel, whether it’s a robo advisor issuing computer-generated advice, a video tutorial, knowledgebase web article or printed booklet.              

What Millennials want in the digital world

It’s not just financial advice that Millennials want. As self-determined people, they also want technology to empower them to take greater control of their finances. To deliver this, organisations will need to undergo digital transformation, adopting new technologies, such as cloud computing and artificial intelligence, to create the most effective and efficient solutions.

In the same way that online platforms and phone apps make personal banking easier and services more accessible, asset and wealth managers also need to provide tools that match the financial habits of Millennials. According to a study by Accenture, two-thirds of Millennials want access to tools like robo advisors and self-directed investment portals[1]

Millennials also value relationships with the companies they use. The use of digital communications is vital here to deliver personalised and relevant communications about investment opportunities. Putting this in place, however, can be challenging. Companies will need the necessary infrastructure, tools and expertise to mine data effectively and send out communications via the right channel and at the best times.

One solution in which many organisations find value is in working with a trusted partner, like Paragon Customer Communications. Bringing specialist expertise to the table and providing end-to-end solutions that utilise advanced technology, we can ensure efficient and effective communication takes place, helping asset and wealth managers meet customer expectations and drive growth. 

Millennials and wealth management – the rise of ethical investing

Millennials are keenly aware of the social, political and environmental issues facing the world and will take a stance by choosing brands they perceive as ethical. This has several repercussions for asset and wealth managers. While strict adherence to the Asset Manager Code of Conduct should be a given, the organisation must also be able to offer the client opportunities for both ethical and impactful investment. They will boycott opportunities perceived as unethical, such as in companies that undertake animal testing, preferring to invest in areas like green energy that have a positive impact.

However, offering ethical investments may not be good enough. If the same company also offers investments in sectors they find problematic, Millennials may still go elsewhere. To rebuild trust, therefore, managers may need to abandon certain types of investment altogether and this will have significant implications for the industries involved.

In conclusion, the Millennial generation is becoming a significant market force. To meet their needs, expectations and demands, asset and wealth management will need to transform. It will have to embrace new technologies in order to provide the services, tools and communications that this generation wants and it will need to offer more ethical products in order to appeal to these principled investors. 


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