NextGen Investors: Targeting the Millennial Generation

by Ashley Globerman, July 15, 2014
Industry Trends
EMEA, North America

Abstract

“Millennials,” also known as Generation Y, are one of the largest generations. They are also the next generation of investors to be targeted by wealth managers of all types.

In the report NextGen Investors: Targeting the Millennial Generation, Celent analyzes millennials’ approach to investing and personal financial management, which has largely been shaped by recent financial market events in a technology-driven world. Millennials, with their unique characteristics and investor profile, are in turn shaping the wealth management industry.

Recent developments in the financial market and digital channel evolution have shaped millennials’ view on investing and the subsequent opportunities and challenges this poses for wealth managers. The report examines several issues and their impact on investors, such as the loss of financial assets and investor confidence, millennials’ skepticism toward financial institutions and advisors, and an increase in regulation. Additionally, this report profiles the millennial generation as a whole, and specifically retail investors, including their product and service preferences, the importance of digital strategies to the millennial investor, and the growing female millennial investor segment. Finally, the report takes a prospective look at the long-term effect of millennials’ investment behavior on the financial market and the potential implications for wealth managers and financial advisors.

The following countries are included: France, Germany, Italy, Spain, Switzerland, and the United Kingdom (collectively “Western Europe”) and the United States. In Western Europe and the US, there are an estimated 158 million members of Generation Y, born roughly between 1982 and 2000 and the children of the Baby Boomer generation.

“Generation Y will continue to develop over time; as such their defining traits and role in society will evolve,” comments Ashley Globerman, Analyst with Celent’s Wealth Management Group and author of the report. “At this point we can conclude that millennials are a unique investor segment for three major reasons, namely their significant role in one of the largest intergenerational wealth transfer markets to date, their substantial debt levels as they enter adulthood in a low employment and wage environment, and finally, being one of the most tech-savvy generations. This poses both challenges and opportunities for the wealth management industry, which struggles to stay ahead of technological innovation.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

2

The Millennial Generation

5

 

Defining the Millennial Generation

5

 

Generation Y Women

6

Millennials and Investing

9

 

Millennial Investor Profile

9

 

Investment Product Preferences

12

Channel Preferences

14

 

Digital Channels

14

 

Social Media

14

 

Mobile Devices

16

 

Online Channel

17

Outlook

20

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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