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Satisfying the Millennial Investor, It’s Digital First

When it comes to personal investing, it should come as no surprise that millennials are first in line to use online investment platforms, also known as robo-advisors.  Robo-advisors automate investment trades with little to no human oversight, and many offer commission-free trading, making these platforms an easy way for the digital savvy millennial generation to shore up financial wealth. As a result, millennials are almost twice as likely to use an online investment platform than their Baby Boomer parents, according to a study conducted by Vangaurd

Unfortunately, for the inexperienced, online investing creates an open invitation to pile on losses and sink financial security. An Ally Financial, Inc. survey exposes millennial vulnerabilities when it comes to long-term financial planning, with sixty-six percent calling investing intimidating or scary.

Millennial inexperience provides an open opportunity for banks, credit unions and financial advisors to take this young cohort by the hand and lead them toward financial safety. To engage these younger investors, however, financial institutions will need some digital savvy of their own to get there.

Understanding the Millennial Approach to Investing

Part of the allure of digital investing is the ease and simplicity. From the living room sofa or kitchen table millennial investors can review stocks and build their portfolio. Platforms even guide the process to a degree, helping investors by offering suggestions.

However, there is more to sound investing than selecting stocks. When millennials have a question or are uncertain about the direction they should take, online investment platforms can be short on answers and support. This can be a problem for any do-it-yourself investor, but particularly for millennials who readily admit to a lower level of financial literacy than older generations.

In a survey conducted by Ally Financial Inc, thirty-nine percent of millennials admitted to not knowing the first thing about investing. Low financial literacy manifests itself in a more conservative investing strategy for even the most financially successful millennials, according to Investopedia’s Affluent Millennial Investing Survey. For more than half, that could mean working well beyond retirement age. 

Financial institutions and brokerage firms can reach millennials by combining the up-front allure of digital investing with access to personal guidance. It’s an approach that millennials are embracing at even greater numbers than robo-advisor platforms. 

According to the Broadridge/Roubini ThoughtLab survey, sixty-seven percent of millennials plan to invest with full-service financial providers or universal banks. Fifty-seven percent plan to partner with a financial advisor linked to a branded institution. 

However, for millennials like these, digital tools are still an important part of the investment process.  Thirty-three percent say they expect anywhere, anytime access to information and investment services through any device. Thirty-nine percent expect to use tech-enabled services to customize products and investment services within the next five years. 

The key to gaining millennial investments is providing a fluid omni-channel experience. Millennials expect to manage much of their investment actions via digital channels, but even when interacting personally with advisors, digital takes priority.  According to the Broadridge/Roubini Thought Lab Survey, millennials prefer texting or interacting through online portals and social media platforms over face-to-face interactions.

Engaging Millennials Starts with Digital Banking

For traditional financial institutions, gaining the trust of millennial investors starts by offering a fluid digital environment for everyday banking services. Online and mobile banking capabilities are also the number one factor millennials use to select a financial institution, according to a survey conducted by Zafin.

When fluidly integrated with in-person services, digital channels create the type of customer experience that encourages long-term relationships and growth for the financial institution. Millennials that are happy with the customer experience provided by their bank or credit union are far more likely to engage them when it comes to filling their investing needs.

With $30-$40 million in Baby Boomer wealth set to trade hands over the next decade, there has never been a better time to reach millennials. By combining robust digital capabilities with personal guidance and advice, traditional financial institutions are the most qualified to help this rising generation to reach their financial and investing goals.  

Writer Name

Kathleen Hesketh

Publication Date

Published on Jun 16, 2021


<p>When it comes to personal investing, it should come as no surprise that millennials are first in line to use online investment platforms, but robo-advisors and the like are not always the best approach to investing for an underconfident generation. This article explores the true attitudes of millennials toward investing and how banks, credit unions and financial advisors can combine digital capabilities with a personal approach to help millennials and gain market share.</p>

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