Exactly what a “Millennial” is has been the subject of some debate. However, according to the Pew Research Centre, they are people born between 1981 and 1996, making them between the ages of 22 and 37 in 2018. Notwithstanding the naming conventions, the interest in the views and attitudes of Millennials has been subject to (as have generations before) much research and conjecture.
As highlighted by Kepler Cheuveux research, Millennials’ core values, characteristics and budget will influence the way they think, spend and act. Specifically, and without making a hasty generalisation, the “connected generation” is allegedly favouring experiences and discovery, looking for authenticity, and is much more conscious of the environment – all of this against a backdrop of lower budget and disposable income compared to previous generations at the same age.
There have been many papers written on this generations’ preferences as consumers of goods and services across industries; however, it is still unclear what their attitudes towards (and knowledge of) financial matters such as savings, investments and financial services in general are, and what impact this may or may not have on the demand for certain financial products.
This is specifically interesting in the context of increasing wealth inheritance from their Baby Boomer parents ($30trn in financial and non-financial assets in North America over the next few decades, according to Accenture). Specifically, the views of Millennials actually working in the financial services sector are worthy of exploration as this is a highly regulated industry where its working population has an above-average knowledge of finance.
The Millennial Disruption Index, which surveyed 10,000 Americans born between 1981 and 2000, ranked the banking industry at the highest risk of disruption, with 71% of young respondents stating they “would rather go to the dentist than listen to what banks are saying”.
On the other side, a Bankrate survey found that 32% of US Millennials preferred to keep their money in cash rather than in investment products (with even a whopping 43% of 20-25-year-old Millennials). A key question emerges as to how can the financial services industry better cater to this new generation of potential investors, one that appears to expect investment advice on the same terms as they get from other businesses – digitally delivered, socially/environmentally conscious, cheap and networking oriented.
What might this mean for sustainable investment which, it appears, Millennials favour?
These are some of the questions First State and Kepler Cheuvreux would like to explore further to understand the investment interests of Millennials and Millennial investment professionals. Specifically, we are interested in how Millennials’ investment decisions and choices may be influenced by both their working environment and a range of perceptions and industry-conditioned behaviours relating to potential investment returns, including social and environmental outcomes and impacts .
We hope to get a sense of whether Millennials will really prove to be an important driver of growth in sustainable and responsible investment or merely a nice-to-have fad. To provide a contribution to this industry debate, the outcomes of this research will be made public.
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