Asset managers need to start preparing now for the millennial generation taking over the investment reins from baby boomers, according to a report.
Those who are not preparing now will be at a distinct disadvantage competitively in the future said ‘The Cerulli Edge’ by Boston-based research and consulting firm Cerulli Associates.
The values, priorities, and expectations of millennials, currently aged 20 to 35, differ from those of their baby boomer parents, currently aged 51 to 69, the report said.
While Cerulli believes that the older generation will be in the investment driving seat for another decade, it warns that managers that have not started factoring in these differences risk disappearing from the radar of the millennial cohort, which will be worth an estimated US$19-24 trillion (€22-27 trillion) by 2020.
Barbara Wall, Europe managing director at Cerulli, said: “The use of technology and different investment time horizons are among the intergenerational differences. The ‘Digital Natives’ are also more socially conscious investors.”
She added: “Asset managers need to gain a deeper understanding of the broad communication mindset of a millennial–how they prefer to interact with companies, not just within finance, but across a range of industries.”
Wall said more millennial employees should be appointed to decision-making posts and that asset managers should be making greater use of data mining and artificial intelligence to gain an insight into what motivates the generation.
She said: “There can be no doubt that this generation will leave its mark on future trends. We believe that managers that wait until these trends are established before responding will be at a distinct disadvantage when it comes to competing for business.”
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