MILLENNIALS IN WEALTH MANAGEMENT

Transcription

1 MILLENNIALS IN WEALTH MANAGEMENT A SURVEY OF DIGITAL ATTITUDES AND BEHAVIOR IN FIVE KEY MARKETS PANEL SURVEY FEBRUARY 2018 Report Extract Original report with 37 pages incl. comprehensive data sets CARMELA MELONE SENIOR ANALYST

2 C ONTENT 1.0 EXECUTIVE SUMMARY METHODOLOGY REPORT OBJECTIVE SURVEY SAMPLE DEMOGRAPHICS AMOUNT OF INVESTABLE ASSETS CURRENCY CONVERSIONS SURVEY QUESTIONS DATA ANALYSIS SURVEY RESULTS SUMMARY OF EMPIRICAL FINDINGS 10 USAGE OF DIFFERENT COMMUNICATION DEVICES & CHANNELS MOBILE USAGE PATTERNS 13 OBSTACLES TO MORE MOBILE APP USAGE 13 MOBILE NEEDS OF MILLENNIALS 14 LEVEL OF SATISFACTION WITH WEALTH MANAGERS MOBILE PERFORMANCE MILLENNIALS ATTITUDES TOWARDS ROBO-ADVISORS 17 WHAT MILLENNIAL INVESTORS EXPECT FROM A ROBO 17 MOST IMPORTANT ROBO FEATURES COUNTRY-SPECIFIC FINDINGS 19 MILLENNIAL USE PATTERNS FOR DEVICES ACROSS COUNTRIES 20 THE MAJORITY OF MILLENNIALS USE WEALTH APPS NO MATTER WHERE 22 DIFFERENT PERCEPTIONS OF ROBO-ADVISORS ACROSS THE KEY MARKETS 25 COUNTRY-SPECIFIC CHARACTERISTICS 28 US MILLENNIALS 28 UK MILLENNIALS 28 FRENCH MILLENNIALS 28 GERMAN MILLENNIALS 28 SWISS MILLENNIALS ELEVEN THINGS WEALTH MANAGERS MUST DO TO REACH AND KEEP MILLENNIAL CLIENTS APPENDIX 31 SURVEY QUESTIONNAIRE AUTHORS 36 DISCLAIMER 37 MILLENNIALS IN WEALTH MANAGEMENT 2

3 TABLE OF CHARTS Summary statistics millennial sample 7 Currency conversions 8 Country distribution of the millennial sample 8 Country distribution and wealth segments of the dataset 10 Preferred communication channels to interact with financial advisor/financial institution 11 Electronic devices preferably used for financial matters by age segments 11 Millennials preferred communication channels to interact with financial advisor/institution 12 Share of respondents using mobile apps provided by their bank/wealth manager 13 Reasons why the respondents do not use mobile apps provided by their bank/wealth manager 14 Frequency of use for different wealth management app features 15 Satisfaction levels for functions offered by banks through their mobile channels 16 Awareness of robo-advisors among millennials 17 Awareness of robo-advisors across the age segments 18 Usage of robo-advisors among millennials 18 Cross-country differences in device usage for financial matters of baby boomers 20 Cross-country differences in device usage for financial matters of Generation X 21 Cross-country differences in device usage for financial matters of millennials 21 Cross-country differences for using mobile wealth management apps for baby boomers 22 Cross-country differences for using mobile wealth management apps for Generation X 22 Cross-country differences for using mobile wealth management apps for millennials 23 Baby boomers preferences for digital communication 23 Generation X respondents preferences for digital communication 24 Millennials preferences for digital communication 24 Cross-country robo awareness among baby boomers 25 Cross-country robo awareness among Generation X respondents 25 Cross-country robo awareness among millennials 26 Cross-country robo-advisor usage of baby boomers 26 Cross-country robo-advisor usage of Generation X respondents 27 Cross-country robo-advisor usage of millennials 27 To order the report, please click here MILLENNIALS IN WEALTH MANAGEMENT 3

4 Summary 1.0 SUMMARY Wealthy millennials show some striking contradictions in their digital attitudes towards financial matters, and wealth managers must consider these when aiming to win their younger clients hearts. On the one hand, they are all about digital nativism, using mobile first, loving text and chat, and being intrigued by robo-advisors. On the other hand, they display some remarkably conservative attitudes and behavior when it comes to digital banking and wealth management. Our report explores why wealth managers have to keep an eye on younger client segments and how digital platforms should look to gain the loyalty of this broad and heterogeneous demographic group called millennials. For the report, we conducted a panel survey in the five key markets the US, the UK, France, Germany, and Switzerland addressing the digital needs and preferences of 1,000 affluent and high-net-worth individuals aged 18 to 34. The report identifies their preferred devices, communication channels and mobile app features for financial matters. It analyzes the awareness, openness towards and current usage of robo-advisors among wealthy millennials and identifies the key features robos must offer to succeed in this attractive client segment. Further, the survey reveals major differences between millennials and the older generations as well as between the different wealth segments and key markets. The report sees a lot of variance across different wealth brackets especially the wealthiest segment among millennials with $1 million of investable assets has rigorous digital requirements for their wealth managers and banks. The report identifies their needs and preferences and the strategies and tools wealth managers should employ to tailor their digital offerings to this very important client segment. In order to explore how the insights differ between the specific markets and generations, the report also compares the country-specific results for each client generation (millennials, Generation X and baby-boomers) in the US, the UK, France, Germany, and Switzerland and details similarities and differences among countries and generations. Based on this comprehensive analysis of the needs of different groups of wealthy millennials across generations and countries, the report derives a comprehensive set of recommendations on how to take advantage of the generational shift by employing the right strategies, initiatives and digital tools. MILLENNIALS IN WEALTH MANAGEMENT 4

5 Methodology 2.0 METHODOLOGY This report investigates affluent and high-net-worth millennials attitudes and preferences when it comes to digital finances. This includes the use of mobile channels offered by their financial institutions as well as their openness toward and awareness of the concept of robo-advisors and online investing. SURVEY SAMPLE This report is based on data derived from our panel survey that took place in October and November In this survey we asked 1,000 respondents from five key markets (US, UK, France, Germany, and Switzerland) questions that targeted their attitudes and preferences when it comes to digital banking and investing. We focus on the data derived from millennial respondents aged 18 to 34 only, to gain insight into the expectations of the up and coming generation of HNWIs and affluent investors. The largest fraction of these millennials comes from the UK with 24%, while Switzerland and the US form the smallest markets in this subsample with 16% and 17% respectively. Not surprisingly, millennials appear to be at the beginning of their wealth accumulation, as 53% are in the lowest wealth bracket and have up to $500k of investable assets. Nevertheless, the data allows for valid conclusions for the wealthiest segment, too, as 31% of the millennials have more than $1 million of investable assets. SURVEY QUESTIONS The 23 survey questions aim at addressing the following areas: Usage of devices and operating systems for financial matters Usage of wealth management apps and mobile websites Expected and most-used features of mobile wealth management channels Satisfaction levels for features offered by mobile wealth management channels Investment behaviors and types Awareness of and openness toward robo-advisors/ online investment platforms Expectations with regard to robo-advisors investment tasks, technical features, and onboarding processes The full questionnaire can be viewed in the appendix. DATA ANALYSIS After the field phase, the data was analyzed with regard to basic statistical measures such as frequency distributions. To determine any significant differences and demographic trends, the sample was additionally segmented by country and the amount of investable assets. The full survey results are available in the data appendix. (... more in full report pages 7 to 9) MILLENNIALS IN WEALTH MANAGEMENT 5

6 3.0 SURVEY RESULTS (... more in full report pages 10 to 28) 4.0 ELEVEN THINGS WEALTH MANAGERS MUST DO TO REACH AND KEEP MILLENNIAL CLIENTS The survey results presented in the previous chapter led to some important implications for wealth managers as well as robo-advisors that can help to master the generational change that is already rattling the wealth management industry across the globe. Despite some similar attitudes towards investing and banking, there are clear and present differences which require deep change in the way wealth managers relate to their younger clients. In the following, we summarize the major points that need to be taken into account when aligning a winning digital strategy that is able to convince even the digital natives : (... more in full report pages 29 to 30) 5.0 APPENDIX SURVEY QUESTIONNAIRE (... more in full report pages 31 to 35) MILLENNIALS IN WEALTH MANAGEMENT 6

7 Authors 6.0 AUTHORS Carmela Melone, Senior Analyst, specializes in research in the fields of social media for wealth management and mobile apps for financial advisors. Her specific areas of interest are in software benchmarking, channel strategy and online security. Prior to this, she worked at an exchange platform for intellectual property rights, responsible for the digital media marketing strategy. Carmela has a Master s degree in Economics with specializations in Information Management and International Economics from the University of Hagen (Germany). Steffen Binder, Managing Director and co-founder of MyPrivateBanking Research. Steffen is Head of Research and oversees the research agenda and analyst teams. He is responsible for creating and developing powerful concepts and relevant content to help our clients navigate a rapidly changing digital environment. As a regular speaker at finance and technology industry events around the globe, Steffen is frequently quoted by leading business media such as the Wall Street Journal, Handelsblatt and the Financial Times. Prior to this, Steffen was Managing Director of Forrester Germany, Switzerland and Austria. He came to Forrester through its acquisition of Forit GmbH, a leading European technology research company, of which he was also a co-founder. Prior to that, Steffen was a partner at Monitor Company (Strategy Consulting). He holds Master s Degrees in Organizational Behavior from Rutgers University (USA) and in Public Administration from the University of Konstanz (Germany). MILLENNIALS IN WEALTH MANAGEMENT 7

8 Disclaimer DISCLAIMER IMPORTANT NOTICE AND DISCLAIMERS: NO INVESTMENT ADVICE This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. This report is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. It does not constitute a general or personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. The price and value of securities referred to in this report will fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of all of the original capital invested in a security discussed in this report may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. DISCLAIMERS There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth in this report. MyPrivateBanking GmbH will not be liable to you or anyone else for any loss or injury resulting directly or indirectly from the use of the information contained in this report, caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in this report. COPYRIGHT MyPrivateBanking GmbH s Products are the property of MyPrivateBanking GmbH, Switzerland, and are protected by Swiss and international copyright law and other intellectual property laws. Customers are prohibited to copy, forward or store MyPrivateBanking Products outside of the legal entity that has made the purchase. MyPrivateBanking GmbH Hafenstrasse 50B CH-8280 Kreuzlingen, Switzerland Tel For our latest reports please check: MILLENNIALS IN WEALTH MANAGEMENT 8