Global asset managers need to focus on understanding how millennials will invest their money, or else they risk losing their competitive edge, according to research from consultancy Cerulli Associates.
Millennials, currently aged 20 to 35, have very different priorities and expectations from their ‘baby boomer’ parents, aged 51 to 69, Cerulli found. They are far more likely to interact through digital channels, and are more likely to invest with a socially-conscious filter. The Millennial cohort is estimated to be worth $19-24 trillion by 2020.
‘Asset managers need to gain a deeper understanding of the broad communication mindset of a Millennial—how they prefer to interact with companies, not just within finance, but across a range of industries,’ Barbara Wall, European managing director at Cerulli, said in a statement accompanying the report release.
Research by the firm’s Singapore office shows that 75% of millennials conduct at least 20% of their engagement with their wealth manager through digital mediums, compared to 54% for baby boomers. In five years, the proportions are projected to have risen to 95% and 73%, respectively.
Wall said that asset managers should consider appointing Millennial employees to decision-making posts, and make use of data mining and artificial intelligence to understand millennials’ investing behaviour.