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Blog November 6, 2019 Rohan Narula

The Millennial Era Of Wealth Management

The emergence of neo Millennial clientele, the rapid progression in the digital sphere and the ever-evolving regulations in the financial sector have brought about a significant change in the way wealth management firms function. These developments demand a new, more efficient business model that is digitally compatible and customizable. The trends articulated below are the key drivers bringing about a change of course to the wealth management companies.

  • A shift in demographics

Millennials will surpass Baby Boomers in becoming the largest generation. Women will begin to control a greater share of assets unlike earlier.

  • Evolving client expectations

With the growth in the number of Millennial investors, the service expectation and fee consciousness tend to change as well. Millennials expect more transparency and wish to retain greater control when it comes to managing their wealth.

  • Emerging digital technologies

With the new generation and evolving technology, investors today value digitally savvy solutions that have a collaborative approach.

  • Increased regulations

Fiduciary responsibilities, fraud prevention and other concerns are being tackled by increasing the regulations and this, in turn, is pushing the wealth management firms to reform their operation to comply with the new and changing regulations.

A Focus On The Millennials

Today, millennials are already investing or seriously considering investing, and their expectations are different from that of the previous generation. This digital-friendly generation is forcing wealth management firms to create a new kind of client experience that suits the demographic’s complex needs.

Two-thirds of the Millennials[1] show concern regarding the state of the world. This is shown in their preference for socially responsible brands and companies, without considering money as the sole success factor.

When it comes to economic conditions, the generation tends to act more cautious. The past financial crises and the volatility of the financial markets have a major influence on them when they look into financial subjects. As a result of their cautious nature, they turn to technological advancements for better financial advice and to reduce investment risks.

With the highly evolved technology and digital trends, a one-size-fits-all solution is something wealth management firms cannot aim for. To chart out the road map for the future wealth advisors, it is essential to examine the Millennials’ behaviour, given the fact that they are becoming the largest clientele for the wealth management companies.

Listening to the Millennials, it is evident that:

  • The generation wants to learn

6 out of 10 Millennials are keen on educating themselves about wealth management and budgeting.

  • They expect value for the price paid

Millennials, who are price conscious, are ready to pay for quality and convenience. 41 percent[3] of them discuss fee options on a quarterly basis as compared to a mere 14 percent of Baby Boomers.

  • They want technology-friendly solutions

Millennials expect wealth advisors to employ technology to optimise investment returns.

To accommodate the newer expectations of the present generations, wealth management companies need to modify and advance their customer service model.

The Affluent Millennial Behaviour

In 2015, 40 percent of the adult population worldwide consisted of Millennials and as per Deloitte studies, “Until 2020, the aggregated net worth of global millennial population is expected to more than double compared to 2015, with estimates ranging from $19 to 24 trillion.[1] For a smooth transitioning of the wealth management industry from serving Baby Boomers who are entering their retirement phase to serving Millennials who are in their early years of wealth accumulation, a closer examination of the affluent subset of Millenials is imperative — the subset that is reshaping the future of wealth management institutions.

Sourced from a study by Ipsos and LinkedIn[2], summary of the behavioural pattern of this subset is identified below.

  • The affluent subset is optimistic about their financial future, and are willing to make sacrifices today to achieve their ambitious goals tomorrow.
  • They are independent in nature, preferring greater involvement and control in making financial decisions.
  • This subset does not depend solely on wages for their primary source of wealth. They are open to multiple sources of income.
  • They are technology-friendly and value their ability to govern their finances using technology, especially from mobiles.
  • Nearly 84 percent of them seek to make educated choices. They want to be well-informed by their financial advisors.
  • This subset is more likely than previous generations to consider investing in socially-conscious companies.
  • They are more open-minded as compared to previous generations in that they are more than willing to take up financial offers from non-financial companies such as Google and Apple.
  • Social networking is fundamental for these Millennials who consume financial information from social media.
  • They are more inclined to save than the previous generation. 2 out of 5 affluent Millennials make large contributions to their savings.
  • They lean towards firms and institutions that have an existing and strong relationship with their family members.

A snapshot of the most important factor that these affluent Millennials look into when considering wealth management companies to assist with their financial decisions is illustrated below:

Source: The Financial Brand [4]

A Firm For The Affluent Millennials

To navigate through the progressive needs of the affluent Millennials and to serve them to their satisfaction, here are a few factors that wealth management firms should focus upon:

  • Effective communication

The affluent Millennials prefer to set their own terms and have an open interaction with their financial advisors. They want greater access and control over their financial transactions and are looking for a counsellor rather than a manager.

  • A social yet personal engagement

Financial advisors should leverage social media to engage with them. It is on the social platforms that these Millennials are looking for solutions or information that instantly fits their financial situation. Wealth management firms can provide bespoke portfolio options, investment ideas and risk management information targeting groups based on their interest and social media tracking analytics.

  • Transparency to build trust

Firms should establish a transparent pricing structure and should focus on customized solutions that provide value for the price paid.

  • Embrace technology

With the digital sphere and technological advancement gaining traction in day-to-day lives, It is critical that wealth management firms adopt tech-savvy solutions to serve the generation of today.

According to Ashley Globerman, a Celent analyst “The wealth management landscape is influenced by Millennials, who have grown up during a time of technological change, globalization and economic volatility, which has influenced their behaviours and experiences. Millennials are tech-savvy, encumbered with debt, philanthropic, financially risk-averse, and have a culturally inclusive worldview.[4]” It is not just an option anymore for wealth management firms to offer tech-oriented solutions, it is now fundamental.

Disclaimer: This blog is published for educational purposes only and does not constitute investment, legal or tax advice or a recommendation or an offer for wealth management in any market, territory or country. Please consult a professionally certified tax or financial advisor for any wealth management related decisions. All views contained in this blog are the personal opinions of the author based on publicly available research and news.


[1]https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial-services/lu-millennials-wealth-management-trends-challenges-new-clientele-0106205.pdf
[2] https://business.linkedin.com/content/dam/business/marketing-solutions/global/en_US/campaigns/pdfs/affluent-millennial-research-eng-hk.pdf
[3] https://www.accenture.com/ro-en/insights/capital-markets/millennials-money-wealth-management
[4] https://thefinancialbrand.com/71459/millennial-wealth-management-banking-digital-cx-trends/

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