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Millennials represent a bridge between the analog era and the digital era. Many began childhood with Legos and Lincoln Logs, yet entered adulthood with iPhones and Uber. Given their unique historical position, millennials are poised to have an outsized influence compared to previous generations. Their behavior and expectations continue to shape baby boomers and Gen Xers, as well as set the tone for the next generation, the iGeneration.
Millennials confronted a host of unprecedented challenges in the wake of the great recession. They graduated college deeper in debt, but with fewer job prospects than their parents. Many stayed home. In fact, millennials live with their parents into adulthood far longer than any previous generation. This arrangement has created conditions in which millennials have tremendous influence on the behavior and attitudes of their parents.
Boomers and Gen Xers have iPhones and tablets because their kids do. Even though millennials are the first digital natives, their preferred methods of communication have brought older generations up to speed very quickly. Millennials don’t print photos, they don’t leave voicemail, they barely make phone calls.
The old calculus was that companies need to cater to two different sets of clientele: those who prefer digital and those who prefer traditional, face-to-face modes of interaction. But that view is dated. Boomers and Gen Xers are technologically immersed, and their needs are starting to mirror the needs of their children. Wealth management organizations need to pursue digital transformation not solely to prepare for the next generation of investors, but to catch up with the current generation, too.
Millennials have witnessed an unprecedented shift in the way companies do business. Given their experience, they tend to question and critique the status quo relentlessly. If it’s too slow, speed it up. If it’s too expensive, make it cheaper. If it’s too complex, make it easier. And free is better.
Older generations are taking notice.
Advisors report boomers and Gen Xers are asking a lot more questions: How do fee structures work? What am I paying for? Can I do this myself? In addition, millennials show their parents how to use self-service investment platforms, how to do research, compare advisor services and even when and where to invest. Millennial influence is the catalyst for the consumerization of the wealth industry. New tech, new competition and new markets all create pressures to produce greater transparency, expertise and value than ever before.
Older generations aren’t looking so old, after all.
To read the other articles in our Millenial Wealth Insights series, see the related content below.
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