Ah, Millennials … The « Why » generation, broadly speaking people born after 1980, glued to their headphones, constantly shaking the status quo, aiming for a different path of sense and self accomplishment, sometimes to the despair of their elders.

Millennials are about to become the largest adult population segment. With ages ranging from 18 to 34, they will soon enter their prime earning years (and may inherit in the meantime …).

Therefore, Asset Managers and distributors need to understand Millenials in order to survive.

What should they do ?

The purchase of financial products  needs to materialize key moments of the Millennials’ life

• Millennials invest when confronted to a key moment: wedding, parenthood, inheritance, etc. They are also far more likely to invest when growing older: Bankrate found out they are more than twice as likely to invest in their 26-35s than in their 18-25s.
• Create a customer tailored/ centric offer and focus your marketing on needs, not products: it should reflect your audience’s stories, not force into them.
• Millennials want to enjoy and learn daily, sometimes favoring knowledge and experience over money: you should gamify their investment cycle to educate them!

Profitability remains mandatory, but Millennials will not invest against their core values

• Investments have to be profitable, but they also have to match Millennials interests and convictions – they are twice as likely to invest in a stock or fund including social responsibility in its value-creation, according to Morgan Stanley.
• Much like their usual buying behavior, investing will be about sponsoring one’s favorite companies or a sector he believes in … even if Georges Soros famously said « Good investing is boring. »
• ESG based funds are expected to grow in AUM, especially when they perform equally or outperform standard investments: they are key components of many Asset Managers’ strategies for the future, such as Ostrum, and AXA IM. A study conducted by Spectrem group has shown that 49% of Millennials with more than $1 million net worth consider social responsibility as a factor in choosing an investment, against 34% of baby boomers and 27% of seniors.

Reporting should be Digital First and social advisory capabilities are key

• Almost 90% of Millennials say their phone never leave their side – They expect real time, easily understandable information about their investments, just like they consume every other kind of information.
• Millennials constantly consult peers and media prior to acting on advisory recommendation. According to Market Strategies International, they are three times more likely to refer to social media networks than older generations when making purchase decisions: manage your advisers like an online community and trigger product pushes linked to client’s peers interests.

Millennials are “digital natives” but they value interpersonal interactions

• They will not expect face-to-face meetings when unnecessary and may invest anytime, anywhere. 14% of them even say they wouldn’t do business with a company lacking a mobile site or app!
• However, more than 80% of them still value interpersonal relationships with investment advisers. A survey conducted by Broadridge shows that Millennials find in-person meetings and phone calls to be the best way to build trust with a financial adviser: technology is perceived as an additional means to communicate and invest, it is not a substitute to « real » interpersonal interactions.

Bottom line, Millennials might sometimes seem strange, but their desires are not: they want more sense, to use the tools they were born with, and favor inter-personal communication.

Born in a world of perpetual change and uncertainty, they need transparency to feel reconciled with the financial institutions of the post 2007-2008 era. Keeping that in mind will guarantee a nearly smooth transition from the old way to their needs.

Do not hesitate to liaise with us, should you want to talk about Asset Management’s present and future challenges.