How to get millennials interested in their finances

How to get millennials interested in their finances

The 1920s was a decade of change.

Women won the right to vote, there was a mass adoption of cars, radios and telephones and, although it ended in a crash, it began with an economic boom.

The 1920s broke with the past and ushered in a modern era.

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With the 2020s potentially seeing mass adoption of self-driving cars, blockchain and 5G, history could be repeating itself a century on. Wealth management is set to evolve too.

How can financial advisers and family offices usher in the next ‘roaring 20s’?

As we enter a new decade, family offices and wealth managers are facing the largest generational wealth transfer of all time, with $68tn (£52tn) expected to transfer hands in the next 25 years.

Very soon, a new generation will be controlling investment decisions with a different approach and strategy.

Not only will this transform and modernise family offices, it will have a knock-on effect for the companies who advise them.

If financial advisers fail to break with the past and ignore these changing demands in the 2020s, they could risk missing out on significant business opportunities over the next decade.

The next generation of digitally native investors will have different technology expectations than their predecessors.

Key points

  • The younger generation differs from their parents in desire for technology and responsible investing
  • They want everything available instantly on their phones
  • They do not want to invest in a harmful way

Despite a recent wave of investment in technology, some parts of the financial services industry still remain relatively low-tech.

When advisers do meet with younger generations, there can sometimes be a gap in digital capabilities.

And while this may have sufficed in the previous decade, in this modern environment it means one of two things for consultancies: damaging relationships with financial advisers and wealth managers, or creating unnecessary cost and work in the process of responding to ever-more complex and changing demands – or worse, both.

Tech engagement

The crucial difference is that the younger generation is used to having everything at the tip of their fingers; they want all the information immediately available on their mobile phone.

There are a number banking capabilities available on people’s phones, especially with the likes of the new banks such as Monzo, but what we do not have is sufficient technology on the wealth management side.

This is a big gap as the client may well have assets in the bank, which they can see on their phone, but they also have investments and property.

Younger people will now want to consolidate that into one system, and not once every quarter; they will want to have that information on an ongoing basis, to see where they stand in terms of diversification and risk, and costs and the revenues of those assets.

Another similarly progressive and hot topic among the younger generation is the growing concern for responsible investing.