Understanding Millennial Investors

by on Feb 03, 2017

The rise of the Millennials may be the consumer marketing story of this decade. This exceptionally large, diverse, digitally savvy and deeply skeptical generation has confounded marketers in many industries, and financial services is no exception. Among Generation Y, the reputation of large financial services firms was deeply damaged by the Financial Crisis, which has made it difficult for many of these firms to acquire Millennial clients. That said, leading firms are embracing the challenge of cracking the Millennial market, in part because of its sheer size, at 83 million members.

This week, Investor’s Business Daily (IBD) reported on the results of its fifth annual Best Online Brokers survey, with a specific focus on Millennial investors. Among IBD’s findings, the firm reported that Millennials place a premium on sophisticated technology and comprehensive mobile platforms. Those results are consistent with our second major Millennial-focused study, Millennials Revisited: Financial Services and the Digital Generation. This 148-page study leverages findings from surveys we’ve conducted with over 4,000 consumers going back to late 2015, as well as our experience tracking the financial services customer experience and industry marketing/product developments. One major takeaway from our research is that Millennials place a significantly higher value on their financial services firms’ mobile platforms than Gen Xers and Baby Boomers do. This holds true in the banking, investing and defined contribution retirement sectors.

Among retail brokerage customers, 51% of Millennials said that their firms’ mobile capabilities are “very important” or “extremely important,” compared to only 43% of Gen Xers and 23% of Baby Boomers that said the same. Even more impressive are the mobile brokerage platform usage stats, with 71% of Millennials saying they have used their firm’s mobile app or site in the past 12 months versus just 44% of Boomers:

Figure 1: Mobile Account Access by Generation

In the last 12 months, have you logged into your primary brokerage account using a mobile device?

Source: Millennials Revisited: Financial Services and the Digital Generation. Corporate Insight. 2016.

It’s clear that firms seeking to attract and retain Millennial investors must offer a comprehensive mobile platform, as Millennials expect and want to be able to manage their entire financial lives from their mobile device. Unfortunately, Corporate Insight’s Mobile Brokerage Audit service recently assessed the mobile offerings of 17 leading retail brokerage firms and found that none of them earned a “Good” rating for their mobile capabilities. As firms look to improve their mobile capabilities to win Millennials, it’s important that they prioritize their mobile development to match Millennials’ device preferences. Corporate Insight’s 2016 Investor Survey found that Millennials overwhelmingly prefer to access their brokerage accounts via an iPhone app rather than an Android app, iPad app or mobile site.

Figure 2: Device Usage by Generation

Through what method(s) have you logged into your primary brokerage account using a mobile device?

Source: Millennials Revisited: Financial Services and the Digital Generation. Corporate Insight. 2016.

Our full study provides in-depth analysis of Millennials’ digital behaviors, preferences and expectations, and explores the unique characteristics of this group and the challenges that they pose to banks, brokerage firms, insurers and retirement plan providers. To learn more about our research on the space, you can download your free copy of the study’s preview.