Millennials, whether fair or not, do not have a great reputation.
This group of people, born sometime between 1980 and 2000 are, according to some, lazy, entitled, narcissistic and more interested in their smartphones than human interaction.
Yet others praise their work ethic and argue that businesses need to recognise their potential.
A quick look at Google's search recommendations when it comes to millennials indicates some of this opinion.
Mixed perceptions of this ‘Me Me Me Generation’ continue when it comes to their finances. According to a recent report by Merrill Edge, millennials are saving but for different reasons than their parents.
They save to live their desired lifestyle rather than to leave the workforce. They are less interested in getting married and becoming parents than older generations, but more desirous of working their dream job and travelling the world.
Financial expectations are changing. For millennials, short-term goals are much more important than worrying about the future. This goes some way to explaining why they are good at saving but not so interested in investing.
For many, growing up during the recent financial crisis of 2007 to 2008 and seeing their parents suffer has engendered significant distrust in investments, big corporations and risk more generally.
Relatability is another issue. The investment industry is not considered trendy and as such, many young people fail to connect to the industry.
This wariness of investing is compounded by high student debt, house price rises and the fact that young adults today earn significantly less than their counterparts in past decades.
Not just a millennial problem
So, what does this mean for asset managers and the savings vehicles that support them? While millennial saving for short term goals may be damaging to their long term financial health, it is also bad news for asset managers.
Without the custom of the incoming generation, the industry will face some serious challenges. Recent research from Wealth-X found that 81 per cent of asset managers say they want to become more attractive to the younger generation, so many are acutely aware of the issue and are making it a focus. Yet, we are not seeing much real-life evidence in terms of a shift.
It is simple - asset managers that fail to adapt business and operating models to attract the next generation of wealth may risk losing a substantial pool of future investments. It is essential that we work together to harness the upcoming generation by showcasing the potential success of investing.
It’s game time
The big question is how do we work together to show the importance of investing to this new generation? Gamification, defined as “the process of adding games or gamelike elements to something (such as a task) so as to encourage participation” may be one way to engage and educate future investors.