July 2017 – Millennial Mystery Shop Part One – Discount Brokerage Firms

Born between 1981 and 2000, millennials are already responsible for more than $1 trillion in total consumer spending, according to Nielsen. Some estimate that they will reach an annual net income of $8 trillion by 2025 as they enter their prime earning years and begin to inherit wealth from their baby boomer parents. This makes them an emerging economic force that present a major opportunity to financial institutions.

So how are millennial prospects being served by these institutions? In this Broker Monitor Report, we present a discount brokerage mystery shop, examining the appointment-booking process, in-branch consultation and follow-up experience of two millennials, aged 26, seeking advice on how best to manage their money. The two prospects, whom we refer to as John and Natalie, visited branches of seven different discount brokerage firms in New York City. They have the exact same profile: the same investable assets, the same level of investing experience (novice) and equal salaries. While it is logical to assume that prospects with practically identical profiles, with the only difference being gender, would have similar experiences, this was not the case. John and Natalie had divergent experiences; they received different investment product recommendations, had dissimilar conversations with representatives and were followed up with in differing manners. This report analyzes and compares the two prospects’ encounters, focusing on their shopping experience and the investment recommendations offered to them by each firm.