Young investors in the UK do not consider managing their wealth a priority, according to a new survey conducted by Invessed in association with YouGov.
The survey asked 2,068 consumers about their attitude towards their financial future. It defined ‘young investors’ as anyone born after 1965. This would include Generation X, millennials and Generation Z.
Invessed found that 42% of young investors were uncomfortable with basic investing principles. Men tended to be more comfortable with investing than women but both genders said they were unlikely to seek professional advice due to high fees and a preference for managing alone.
Over half of respondents (56%) expressed that they did not seek advice due to fees or ‘old-fashioned’ practice.
The data also suggested that the majority of young investors (61%) aren’t actively monitoring their investments. Only 12% use reports to track invests, 6% employ an advisor client portal while 26% use-self investing apps.
What could wealth managers do?
Invessed suggested that wealth managers will need to consider their offering if they want to keep their future client base engaged.
The platform recommended that wealth managers should simplify their language, build financial literacy, encourage good financial habits, and illustrate long-terms benefits to better engage this demographic more effectively.
“A digital-first approach with modern and intuitive client apps and advisory coaching services will appeal to younger investors. It’s also crucial to reduce entry barriers with transparent fees and uncomplicated onboarding processes,” it suggested.
Invessed argued that by embracing these changes, wealth managers could effectively cater to the future generation of wealth holders and ensure their readiness to manage the anticipated $84 trillion wealth transfer from Baby Boomers.
CEO and Founder of Invessed Theo Paraskevolpoulos said: “We believe in facilitating engagement with younger generations. This approach will resonate with them and help increase your assets under management.”
What do wealth managers think?
A growing proportion of advisers are concerned about the impact wealth transferring between generations could have on their business.
According to the Schroders 2023 UK Financial Adviser Pulse survey, 63% are now worried that they could lose business as a result of this, up from 59% the year prior.
Despite this, Schroders noted that attracting younger client did not seem to be a priority for most advisers. The asset management firm said that only 16% of the advisers it survey reported having a differentiated sales and marketing strategy for younger investors. Further, only 25% of advisers are prepared to advise clients with less than £50,000 to invest. In 2019, 52% were prepare to do this.