Additional Broadridge resource:
View our Contact Us page for additional information.
Additional Broadridge resource:
Your submission has been received. We will contact you soon.
Your sales rep submission has been received. One of our sales representatives will contact you soon.
Your submission has been received. One of our customer service representatives will contact you soon.
Millennials are open to using a wider range of investment options and wealth service providers than previous generations. When compared with Boomers, the differences are stark: Over the next five years, 59% of millennials plan to use an alternative investment firm vs. 46% of Boomers. And 53% plan to use a FinTech vs. 23% of Boomers.
It makes sense that FinTech appeals to millennials. FinTechs are giving this group exactly what they’re looking for.
#1 Always-connected, on-demand mobility.
Technology promises the capability to do anything, anywhere. If millennials want to do research on various investment products, there are literally hundreds of apps that provide up-to-the-minute, extremely detailed analyses of nearly any investment product. Some of these apps employ exquisite, tip-of-the-finger tools that, frankly, put some professional platforms to shame.
In addition, FinTech has driven robo-advising into the mainstream. Algorithm-based portfolio adjustment and re-balancing is simple to adopt and manage. No doubt, millennials express concern about the inherent security risks associated with an underregulated market sector potentially exposed to hacking or data breach. But those concerns simply don’t outweigh the lack of trust most millennials have in traditional banking and finance firms.
Courting this demographic increasingly involves meeting them on mobile platforms, providing free, accessible information, delivered in an intuitive package, with consumer-grade elegance and simplicity.
#2 User-driven self-service.
The key thing for millennials is autonomy and control. It’s primarily why they want on-demand, mobile accessibility. And it’s primarily why they believe new technologies favorably cut the middle men. Broker dealers are just now starting to implement the same core principle that drives innovation in other industries: The more you enable your clients to handle routine business, the happier they are.
On the one hand, you’ve got to make it easy and painless to execute trades, re-balance portfolios and develop new strategies. At the same time, enabling investors also means empowering them through education and transparency. The firms that continue to attract younger investors are those who emphasize full disclosure and fee transparency. In addition, firms that put a premium on client education also seem to do well.
Despite endless information at their fingertips, millennials don’t typically know investment jargon, and it’s sometimes difficult for the novice to sort through the noise. Attracting millennials will involve curating relevant material, authoring “explainers,” and connecting them to other like-minded investors.
#3 Cheap and free.
FinTech companies convey two messages that resonate immensely:
Millennials are used to a world where mobile apps are typically free. So, why should investing be any different? Startups like Robinhood offer free trades, no commissions and no minimum account balance. These perks have helped Robinhood claim a market share among millennials that now matches industry titans like Fidelity and Charles Schwab.
The fact is, the advent of FinTech is stirring traditional broker dealers out of their slumbers. And that’s a good thing. Staying competitive will mean learning new tricks from innovative startups. It might mean making the move to acquire some of them, especially ones on the leading edge of emerging technologies. The road will be bumpy, but we firmly believe that new investment models and technologies will open greater opportunity than ever before.
To read the other articles in our Millenial Wealth Insights series, see the related content below.
For more information, please contact us.