We are used to seeing the word ‘millennial’ as a shorthand for young people, or even teenagers, often alongside shopworn cliches about avocado toast and phone addiction, says Matt Ryan Chief Transformation Officer at Reef, Powered by Totem. However, as of 2024 millennials can be as old as 43 – some are grandparents, business leaders or heads of state, and all have adult priorities. This includes investing for retirement that, for some, may only be a couple of decades away
The average age when a person starts investing is 34 years old, with women starting at 32 and men at 35, and since these are averages there will be many investors who begin in their twenties or even teens. This means that if investment advisors don’t evolve to meet the new generation of investors where they are then they will miss opportunities and lose relevance.
The Rise of Millennial Investors
Millennials now form a significant part of the investing population. As they come of age financially, with many entering their peak earning years, their collective influence is shaping the future of investment management. Historically, investing was often associated with older generations who accumulated wealth over time, but with the democratisation of financial tools and the rise of digital trading platforms, millennials have become increasingly active in building their financial portfolios earlier in life. We are also starting to see the beginning of the ‘great wealth transfer’ to millennials from their parents, in which trillions in assets will flow down to younger generations, and a percentage of this will be invested.
This new wave of investors brings a distinct set of preferences and values, often rooted in digital accessibility and ethical considerations. The millennial generation, having grown up during the advent of the internet and mobile technology, is particularly drawn to investment opportunities that are both easy to access and aligned with their personal values. For wealth managers and investment firms, this presents a unique challenge: appealing to a demographic that demands transparency, innovation, and engagement like never before.
The Traditional Approach to Investor Relations
Historically, investor relations have been focused on long-term, often face-to-face relationships built through meetings, quarterly reports, and annual general meetings (AGMs). The communication style tended to be formal, with printed prospectuses and occasional updates on portfolio performance sent out by post. This worked well for an older generation of investors who valued stability and were accustomed to these time-tested methods.
However, younger investors, particularly millennials and those even younger, find these methods not just outdated but also disengaging. The idea of going in person to a meeting at a hotel conference room to drink warm sparkling wine and listen to an investment manager speak isn’t appealing to them, even if it would mean networking with fellow investors. They expect more frequent, timely, and interactive forms of communication. Annual reports and static presentations no longer suffice in a world where real-time information is available at the click of a button. A younger, tech-literate investor base is more likely to respond to dynamic, user-friendly platforms that offer constant updates, mobile access, and the opportunity for dialogue.
Digital Expectations of Investors
Millennials have grown up with smartphones, social media, and instant messaging, and their expectations for service and engagement in the investment world are shaped by these experiences. They value accessibility, where information is always available, and transparency, where they feel they have a clear understanding of how their money is being managed. They are also more likely to seek out companies that align with their social and ethical values, such as sustainable investing.
Wealth management firms can no longer rely solely on static reports or impersonal updates. Instead, they must embrace digital tools like podcasts, webinars, and interactive platforms. Millennials are drawn to media that is engaging, relevant, and digestible on their own terms – most are at the peak of their careers and starting families, so they aren’t looking for extra ways to use their free time. This includes podcasts where financial experts break down complex topics, messaging apps that allow direct communication with investment advisors, and interactive tools available at conferences or via virtual events.
Crucially, this generation is also accustomed to being part of communities, both online and offline. They want to feel connected, not just to their wealth managers but also to a broader network of investors. Firms that can foster community engagement through digital means, such as networking platforms or forums, will likely see stronger loyalty from younger investors.
Digital Tools and Platforms: What Modern Investors Expect
Modern investors expect a seamless digital experience. This includes access to mobile apps that provide up-to-the-minute performance data, user-friendly online portals, and AI-driven investment tools that can offer personalised advice. Many young investors are also interested in automated platforms like robo-advisors, which use algorithms to manage portfolios with minimal human intervention.
Artificial intelligence and machine learning are particularly appealing to millennials, as these technologies promise efficiency and personalisation. An AI-powered platform can analyse market trends, predict performance, and provide tailored recommendations based on an individual’s risk tolerance and financial goals. Additionally, these platforms can be integrated with educational tools, providing younger investors with the resources they need to make informed decisions.
The Risk of Falling Behind
Firms that fail to modernise risk falling behind more innovative competitors. A reluctance to adopt digital technologies or a failure to meet the expectations of younger investors could lead to loss of market share. Start-ups and fintech companies are already capitalising on this by offering platforms that prioritise user experience, accessibility, and engagement. In a crowded marketplace, wealth management companies that do not evolve may find themselves unable to compete with tech-savvy disruptors who can provide the immediacy and convenience that younger investors crave.
Building a Digital Community
Supporting investor relations through virtual events, webinars, and real-time data analytics, enables firms to deliver timely and relevant information to investors. Virtual events are particularly appealing to younger investors who value flexibility and the ability to engage from any location – and even if they do come together in-person, there is an expectation that the experience will be enhanced by interaction via mobile applications. However, access to powerful data analytics that allow firms to track investor behaviour, preferences, and engagement in real time, is what helps them to tailor their communications to individual needs.
Beyond these technical features, adopting this type of approach also fosters a sense of community among investors. Through podcasts, reports, and other interactive content, firms can encourage investors to connect with one another, share insights, and stay informed. This approach taps into the millennial desire for community and collaboration, offering a space where investors can learn from peers and professionals alike.
Put simply, the next generation of investors is fundamentally different from their predecessors. They are digital-first, demanding transparency, engagement, and accessibility. Investment firms that fail to adapt to these preferences will risk losing relevance. However, by embracing the latest technology, wealth managers can effectively engage with millennials and younger investors, ensuring that they remain competitive in an evolving market.
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