The millennial generation came of age with social media and uses mobile apps to manage every aspect of life. How does the trend affect the financial world?
The millennial generation is leading the sea change in the way financial services are provided, according to research showing the vast majority seek financial advice via the internet and expect a high level of online service from their advisors.
“The entrenched internet habits of the millennial generation are putting pressure on the financial services industry to change the way it does business,” said Catherine McBreen, president of Millionaire Corner. “Growing numbers of young investors – tomorrow’s millionaires – are looking for advisors that deliver a full range of services online.”
Teenagers and adults in their 20s make up the millennial generation, roughly defined as individuals born between 1980 and 2000. The group, also referred to as echo boomers and Gen Y, grew up with computers in their homes and classrooms, and came of age with social media. They are more likely than older generations to use social media and mobile devices to shop and communicate with friends, according to Millionaire Corner research that also shows the millennial generation is much more apt to use the latest technology to manage their personal finances.
Use of online financial tools is robust among investors of all age levels, but it’s nearly universal for echo boomers, according to our study of Mass Affluent investors conducted in December 2010. Mass Affluent investors have a net worth of $100,000 to $1 million, not including primary residence, and are largely made up of individuals nearing or in traditional retirement age.
Mass Affluent millennials largely represent upwardly mobile professionals. Nearly all (99 percent) access their personal accounts on line and 98 percent use online bill payment services. Almost all (97 percent) use online tools for financial planning and analysis; 94 percent research investments online; and 93 percent go online to evaluate services provided by financial firms. More than three-fourths correspond with their advisors online.
Affluent members of the millennial generation use mobile technology and apps, and social networks, to a significantly greater extent than the Mass Affluent as a whole. More than half are Facebook users, 27 percent uses LinkedIn and 23 percent, Twitter. Nearly 40 percent have Blackberries and 20 percent have iPads.
Millennials are also more likely to use social media platforms for financial purposes. Nearly 40 percent participate in financial podcasts and webinars, one-fourth uses Facebook; 22 percent, online video postings; 21 percent, LinkedIn; and 17 percent Twitter. More the half of the Blackberry owners use the device on a daily basis to invest, or research and manage their finances.
The millennial generation has much higher expectations than do older investors for the website of their financial service providers. Among other services, millennial investors want the ability to aggregate financial information from multiple providers (76 percent), paperless delivery of financial information (73 percent), online access to specialized alternative investments, such as hedge funds (71 percent), professional profiles of financial advisors (57 percent), and case studies about other clients (54 percent).