Advisers must embrace technology and step up their digital solutions to reach millennials, a new study suggests.
This comes as a massive 46 per cent of young people polled in the UK said they want to do all their financial planning through their smartphone. In contrast, just 13 per cent of baby-boomers confessed they would feel comfortable with such an approach.
The results were published in a study by Legg Mason entitled 2017 Global Investment Survey, which assessed the views of 15,300 individuals around the world.
Gemma Siddle, chartered financial planner and director of client services for Newton Aycliffe-based Eldon Financial Planning, said that although there has been a rise in technical solutions among IFA firms, more still needs to be done.
She added: “We are seeing an emergence of modern technology designed to help people easily set money aside for the future. This is a great step in instigating good financial habits, but there is still a significant lack of technology that focuses on why these people are saving.
“Technology is out there that can help with these questions. However, we tested the water in opening this technology to individuals directly, without professional guidance, and it’s not yet useable by the layperson. I’d love to see more developments in this area.”
The research found that 93 per cent of millennials use their mobile phones to access the internet. This compares with just 52 per cent of baby boomers who have yet to embrace smartphones to the same degree, but instead rely more on home PCs to access the internet.
The proliferation of smartphone use among millennials in the UK means they have been nicknamed "Generation App".
Justin Eede, head of Europe and Americas distribution at Legg Mason, said this trend poses a dilemma for financial advisers who have traditionally delivered their services face to face.
He said: “These statistics reveal the extent to which the demand for fully digital solutions is growing among the younger generation and it will be interesting to see how financial services businesses respond to the challenges this presents.”
The data also found that while the desire is there among some segments of the UK to adopt a digital approach to financial planning, only 16 per cent said they were in favour of either technology-only financial planning, which has no human interaction, or a proposition that is technology-led, but has some human interaction supporting it.