Millennials see digitisation as a "basic requirement" in wealth management
By Emily Nicolle on Monday 9 April 2018
New findings from Accenture shows that millennials are fast becoming the most savvy investor age group as firms slowly adjust to the digital playbook.
Compared to just 30 per cent of Gen X'ers and baby boomers, more than 67 per cent of millennials see robo advice as a basic component of any investment service from a wealth management firm in 2018.
In a report released today by consulting firm Accenture, US Census data has revealed that millennials now make up a sizeable cohort of the investor space that cannot be ignored: 30m of recent investors fall into the millennial age bracket, compared to 31m of Gen X'ers and 37m of baby boomers.
Nearly two thirds of millennials surveyed currently use some form of digital-hybrid model in their investing, with a minor 11 per cent using a robo adviser exclusively. On the other hand, only 20 per cent of millennial investors say that they work with a human adviser exclusively, and even then, only for around four to five years. In fact, 57 per cent of millennials said that they felt their advisers are only out to make money for themselves, highlighting a significant lack of trust in the relationship.
But that might not be the most worrying figure for traditional wealth management firms looking to capture a new audience. Almost half of millennials (45 per cent) would be open to using alternative providers like Google's investment options, making tech giants like Jeff Bezos' Amazon a direct competitor in the future for wealth managers, if and when they expand into that industry.
A generational preference for technology-based interactions is set to become the underlying issue for traditional firms as they move forward, particularly in curating an investment offering. Millennials are twice as likely as baby boomers to invest in ETFs, and 66 per cent want access to self-directed investment.
Education is also a key sticking point: despite 6 out of 10 millennials feeling like they understand their investments as well as a professional, 65 per cent of those still want gamification that will help them learn more about investing and keep them engaged in their portfolio. Women are also a good target group for wealth managers, with millennial women more likely than their cohorts in other generations to consider investing more of their cash.