Millennials are not only developing a healthy appetite for financial advice, they are also more likely to trust digital advice from automated investment services than older generations.
The question of how companies can win over Millennials is a hot topic among digital leaders worldwide. Forrester surveyed online adults in 20 markets to determine their need for and perception of financial services. The resulting report, “Millennials Want Financial Advice, With or Without Humans”, shows that Millennials:
- Want financial advice: Increasingly complicated finances have resulted in younger people actively looking for financial guidance – more so than their older counterparts. Results from the study showed that in Europe, 32% of online adults between the ages of 18 and 37 say they “rely on financial advice from professionals,” compared with 29% of older generations.
- Are not afraid to share personal information in order to get the advice: At least two thirds of US Millennials were willing to share personal data in order to get improved service from their financial institution.
- Are not confident in the current advice they are receiving: Only 38% of US Millennials are confident that a bank or credit union will offer them valuable financial advice, compared with 46% of their older counterparts. Moreover, just over two-thirds of US Millennials say, they don’t know who to approach in order to get reliable financial advice, compared with less than a third of older generations.
While the results of the survey show that Millennials not only want financial advice more than the older generations, it also goes on to show how they differ in terms of the way they want to receive that advice. The report explains how Millennials:
- Prefer to interact with digital touchpoints rather than humans for financial activities: Millennials are more likely to use mobile apps and sites for banking, credit cards, payments, investments, and wealth management. Millennials are also far more likely than older generations to use websites and apps to research financial products.
- Prefer mobile-first for financial advice and tools: While 26% of US adults say they prefer to use mobile devices to access financial services and advice, almost half (46%) of Millennials say they would rather use their mobile phone for this.
- Are interested in digital advice: While older generations remain skeptical about software being able to deliver financial advice, the survey shows that younger folk are much more open to the idea. More than one in three US online Millennials believe that “automated investment services (e.g., robo-advisors) give credible advice,” while just 10% of older generations say the same. Millennials also show more faith in digital financial advice overall, with 39% of US Millennials agreeing with the statement “I trust digital advice,” compared with just 12% of their older counterparts.
Commenting on the findings, Peter Wannemacher, Forrester senior analyst and co-author of the study writes in the report: “Millennials now represent the largest generation in the workforce in the US and many other countries. Over the next two decades, Millennials are set to inherit tens of trillions of dollars in assets — the largest wealth transfer in history. Digital leaders at banks and wealth management firms should invest in digital capabilities and collaborative advice now to better win, serve, and retain Millennials going forward.”