Millennials’ top expectations

OPINION

is generation are entering a maturing phase as their wm are concerned Four out of ve investors want more digital tools to interact with their wealth manager

BY LOMBARD ODIER* (Abbiamo lasciato il testo in inglese per cogliere le sfumature del contenuto, n.d.r.)

Millennials are entering a transitional – some might say “maturing” – phase, especially insofar as their wealth management and banking relationships are concerned. Born between the early 1980s and the mid-1990s, some millennials are now approaching their forties – an age when their investment and wealth management preferences are becoming rmer.

is is especially true for HNWI

millennials – likely current and future private banking clients – who comprise a rapidly growing cohort. As highlighted in a survey1 by Banque Neu ize OBC and the consulting rm Asterès, almost every person who becomes a millionaire between 2026 and 2036 will have been born after 1980, and more than 90% of new wealth generated during that decade will have been created by younger generations. How do these groups see their nancial future? Discover ve strong trends:

1. Sustainability: measuring impact

Sustainability is a key issue for millennials. ey want speci c, innovative investment solutions, designed thematically, that align with their values and work to tackle the issues that concern them the most. Merely adopting a reliable investment strategy is not enough: millennials want to be able to gauge the real-world impact of their investments and to understand the mechanics that underly them. ey also want to minimise the environmental footprint of their portfolios and avoid greenwashing. For them, sustainable investment does not mean going without, however: millennials want robust nancial performance for the long-term, as well as clear, expert reporting, through digital and interactive tools. According to a recently published survey by RBC Wealth Management, 83% of wealthy millennial investors would be prepared to change their nancial

advisor if he or she lacked ESG

nancial expertise. is is backed by the World Wealth Report, published by Capgemini in June of this year, which found that 55% of HNWIs worldwide believe that investing in causes with a positive ESG impact is an “essential objective” of wealth management, one which private banks should take into account.

2. Investments: attracted to innovation and private assets

Millennials are generation start-up – they are also the generation of the 2008 nancial crisis. Millennials

tend to avoid overly complex

or abstract nancial products, preferring more concrete investments whose mechanics and impact they can grasp. Hence they are especially drawn to private assets – like private equity or capital investments – as re ected by the “Capstone Millennials” project launched by Lombard Odier, highlights from which we presented at the beginning of the year. Perhaps paradoxically, millennials are also strongly attracted to novel and innovative investment opportunities. So, for instance, according to the Capgemini report, 91% of HNWIs under 40 years of age have invested in digital assets.

3. Communication: “phygital” is highly valued

How millennials interact with their bank, and the communication methods available to them, are crucial factors – they expect information to be transparent and always accessible. Almost 80% of

OPINION

83% of wealthy investors would be prepared to change their nancial advisor if he or she lacked ESG nancial expertise

millennials want more digital tools for interacting with their wealth manager, versus around 30% for the baby-boomer generation, according to the EY Global Wealth Research Report 2022.

Investors are showing an increasing preference for virtual conferencing over face-to-face

meetings. More than half of those surveyed by oughtLab said that they would prefer to keep in touch with their wealth management advisor through digital channels – the authors of the study believe this likely re ects a lack of time. Millennials are not looking for a 100% digital relationship, however. ey appreciate human contact for matters that require careful thought and discussion, but for everyday and administrative matters they prefer email contact or instant messaging. In their eyes, it is the institution that must adapt to their preferred channels and habits, not the other way round. ey expect a high degree of responsiveness, and want to make contact through less formal channels.

4. Knowledge: understanding their investments

Research conducted by Lombard Odier for Capstone Millennials has shown that this generation do not want to merely allocate capital, they want to understand their investments and the factors that di erentiate opportunities. Millennials have a strong desire to learn, and take nothing as a given. eir age, lack of nancial awareness (which they freely acknowledge), and habits as media consumers mean they expect clear, deeply-researched explanations, preferring bite-sized, digital formats.

5. Network: a banker they can identify with, and who listens to them

ough they expect a high level of experience and professionalism, millennials have little interest in traditional formality, and are not necessarily impressed by either the “decorum” of private banks or by banker status. Millennials want a banker they can identify with, whether in terms of age, mindset or shared interests. In short, someone who could be part of their personal and professional ecosystem, with whom they expect mutual network development. According to Natixis, “82% of millennials consider that time spent with an advisor is important for their long-term nancial success.” ey cite the three most important aspects of the relationship: rst, to help manage volatility; second, to discuss nancial planning with the family; and third, to be able to talk to someone who will listen to their needs.

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