A new wave of investors

With Generations X and Y assuming more significant roles in the global economy, a Millennial outlook is emerging.


Millennials represent the next big wave of investors who will alter client demographics and behaviors in the financial services sector. As a consequence, several important questions present themselves: How will traditional fund industry players earn the loyalty and trust of Millennial investors? How can asset managers increase brand awareness? How can new products and channels be established for appealing distribution models?

Millennials will not necessarily share their predecessors' views about things like security, transparency, convenience, personalization, product performance, and cost, to name a few. With a new generation comes new ways of doing business and new expectations of financial service providers. To maintain the loyalty of these investors, traditional asset managers must re-think the way they interact with future investors.

Three things, in particular, distinguish Millennial investors from Baby Boomers: Concern for the environment, digital solutions, and a shorter time-horizon.

Socially Responsible Investing

For Millennial investors, the environment is a top priority, and this conviction is also shared by many high net worth individuals who demand to invest into environmentally friendly companies.

In fact, a study by Spectrem Group found that 49% of Millennials with more than $1 million net worth said that social responsibility is a factor in choosing an investment. Contrarily, 43% of Generation X and 34% of Baby Boomers investors mentioned that social responsibility matters in investment choices1. Following this movement, the adoption of environment, social and governance (ESG) investment strategies, and socially responsible investing (SRI) are expected to also increase.

As a whole, the Millennial generation are accustomed to fast results. Combined with the fact that we live in a time where services, products, and information can be found within seconds, Millennials can fall into the trap of expecting instant success when using social media and other tech-tools to invest.

Digital Solutions

As consumers' appetite for information grows, standardized quarterly reporting alone will no longer be sufficient. Millennials have embraced digital solutions and are demanding multiple touch points. Mobile technologies have become an indispensable part of their daily life. Corporations that are hesitant to change could risk losing the trust of valuable younger consumers. Successful branding strategies look far beyond traditional corporate advertising campaigns and strive to incorporate social media as well as other tools used by new investors into their digital brand management.

Though it lags behind other industries, the asset management industry is on the cusp of major technological changes that will cater to digitally oriented investors or open new distribution channels. For example, Columbia Threadneedle have been preparing to launch a mobile application which will enable the sale of funds directly to consumers in the UK. Although the app will not be initially targeted to retail investors, it is believed that the new service could eventually be used to target a wide audience of investors2.


1. Spectrem, Millennial Investors More Socially Responsible With Investment Choices

2. Ignites Europe, Amundi eyes robo-advice potential despite 'ridiculous volumes'

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