Live Webinar: Winning Affluent Millennials
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Affluent Millennials are on the brink of a massive generational transfer of personal wealth and, as one of the largest generations in history, this powerful demographic will command major changes within the finance industry. How can you help your Financial Services clients prepare for it? Tune into this webinar where Emily Friedman, senior research consultant at LinkedIn, will present results from a global study conducted by LinkedIn and Ipsos of about 9200 Millennial and GenX Internet users to answer this question.
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Live Webinar: Winning Affluent Millennials
- 1. Winning Affluent Millennials How this power persona is reshaping the industry
- 2. Questions? Send them via the Q&A Feature Feedback? Survey will be available at the end of the Webinar Before we get started… Recorded? Of course!
- 3. Emily Friedman Senior Global Research Consultant LinkedIn Insights
- 4. Research Study Methodology G L O B AL S U RV E Y 20 minute online survey, fielded by LinkedIn and Ipsos in April 2015. Survey measured usage, engagement, attitudes and opinions on financial services. G L O B AL S AM P L E 9200 respondents in 10 countries: US, CA, UK, FR, AU, NL, IN, SG, HK and BR. Quota sampling/ weighting applied to represent internet users in each market. C R I T E R I A Respondents were Millennial (18-34) and Gen X (35-49) Internet users. In the US, Affluent is defined as $100K+ net investible assets, excluding real estate. U S R E S U LT S This report covers results from 1507 total respondents in the US, including: 1004 total Millennials (incl. 121 Affluent) and 503 total Gen X (incl. 150 affluent).
- 5. 5 Understand the differences between Millennials and Gen X with regard to brand affinity, purchase process and information-gathering. Comprehend the role that social media plays and the influence that content and context has on the decision journey for retail financial products. Examine the subset of Affluent Millennials to understand their unique mindset, behaviors and expectations. Research Objectives
- 6. Why are Affluent Millennials relevant? AF F L U E N T M I L L E N N I AL S I N T H E U S 15.5 MILLION Spend $2 TRILLION annually $59 TRILLION intergenerational wealth transfer - *A Golden Age Of Philanthropy Still Beckons: National Wealth Transfer and Potential for Philanthropy Technical Report; Center of Wealth and Philanthropy ; Boston College; May 2014 - *Affluent Population Expands in Size, Spending Power & Marketplace Importance
- 7. While these views are still a minority across all groups, Affluent Millennials are especially likely to envision a cashless, sharing-based economy where banks are no longer their primary institutions. 7 Affluent Millennials have a uniquely progressive view of future financial conditions TOP 3 POINTS OF VARIATION IN FUTURE PREDICTIONS: Cashless society-currency no longer used for transactions 19 % 32 % 21 % 23 % Banks will no longer be primary financial institutions 19 % 27 % 18 % 18 % A sharing-based economy 10 % 24 % 8% 9% Millennials GenXersAffluent Millennials Affluent GenXers
- 8. While more than half of both affluent groups anticipate another financial crisis, Affluent Millennials are significantly more likely to be confident in future economic growth and believe the American Dream* is definitely possible. 8 Despite high expectations of a future financial crisis, Affluent Millennials are unparalleled in confidence *The American Dream is typically defined as the ideal that every individual should have an equal opportunity to achieve success and prosperity through hard work, determination and initiative. 36 % 59 % 44 % 51 % I anticipate another financial crisis to occur I am confident in my country's future economic growth I believe the American Dream* is “definitely possible” 24 % 47 % 18 % 29 % 25 % 44 % 23 % 28 % Millennials GenXersAffluent Millennials Affluent GenXers
- 9. 9 Affluent Millennials Affluent GenXers START A CHARITABLE FOUNDATION START A BUSINESS BUY A SECOND HOME Affluent Millennials set ambitious goals for their lives 3X 3X 19% 30% 27% 6% 11% 18%
- 10. Two-thirds of Affluent Millennials have at least one loan* compared to half of Affluent Gen X 10 Affluent Millennials are more likely to carry debt *Excluding mortgage HAVE AT LEAST ONE… 50% 18% 42% 8% 67% 43% 43% 35% 52% 16% 29% 4% 44% 18% 23% 5% Credit card with a balance Personal loan Student loan Business loan Millennials GenXersAffluent Millennials Affluent GenXers 7X 2X
- 11. Over 1/3 of Affluent Millennials save most of their paycheck 11 Compared to Affluent Gen Xers, Affluent Millennials are twice as likely to save the majority of their paycheck each month % OF PAYCHECK SAVED PER MONTH Affluent Millennials Affluent GenXers 50%+25%+ 66% 35%31% 12%
- 12. 12 Affluent Millennials seek greater involvement and control in financial decisions 47 % 41 % 38 % 34 % 50 % 34 % 40 % AFFLUENT MILLENNIALS AFFLUENT GENX AFFLUENT MILLENNIALS AFFLUENT GENX MILLENNIALS GENX MILLENNIALS GENX 51 % S O L O I S T Perform their own research, make decisions and execute trades V A L I D A T O R Conduct their own research and investment decision
- 13. 27% 37% 48% 50% 25% 13% Despite their tendency to do their own research and seek information on financial decisions, Affluent Millennials are particularly likely to see value in having a financial advisors for their current assets. 13 Affluent Millennials consider financial advisors a must-have AFFLUENT MILLENNIALS AFFLUENT GENXERS Must-have Nice to have Unimportant Must-have Nice to have Unimportant A FINANCIAL ADVISOR IS A…
- 14. More than half of Affluent Millennials with multiple checking accounts hold all of these at the same financial institution. 14 Once they are customers, Affluent Millennials are highly loyal to their financial institutions AMONG THOSE WITH MULTIPLE ACCOUNTS OF EACH TYPE, % WHO HOLD ALL WITH THE SAME INSTITUTION: Affluent Millennials are significantly more likely to say they are very loyal and plan to do more business with financial institutions they work with. C H E C K I N G AFFLUENT MILLENNIALS: 54% AFFLUENT GENXERS: 33% B R O K E R A G E AFFLUENT MILLENNIALS: 37% AFFLUENT GENXERS: 23% S A V I N G S AFFLUENT MILLENNIALS: 39% AFFLUENT GENXERS: 28% R E T I R E M E N T AFFLUENT MILLENNIALS: 42% AFFLUENT GENXERS: 24% 27% 47% 59% 48% 14% 6% Somewhat loyalVery loyal Not loyal AFFLUENT MILLENNIALS AFFLUENT GENXERS
- 15. 15 Affluent Millennials are open to financial offerings from traditionally non-financial brands. 57 % 69 % 47 % 47 % “Millennials are different. They have grown up empowered and expect to have a more self-directed life. So they are looking for solutions, not products.” - Mohamed El-Erian, Chief Economic Adviser, Allianz Millennials GenXers Affluent Millennials Affluent GenXers % WHO WOULD TRY FINANCIAL OFFERINGS FROM NON-FINANCIAL BRANDS
- 16. 1 in 3 Affluent Millennials uses Apple Pay or Google Wallet; more than 3X vs. Affluent Gen X 16 Affluent Millennials have high adoption of NFC mobile payment platforms BRAND BIZ: Which of these companies do you currently use? Base: All Respondents - Millennials (n=1,505), Gen X (n=805), Affluent Millennials (n=165), Affluent Gen X (n=254) indicates significant difference at 95% level of confidence Millennials GenXersAffluent Millennials Affluent GenXers 12% 34% 8% 7% 16% 31% 10% 11% 9% 25% 3% 6%
- 17. 17 When choosing financial institutions, social presence and relationship history are uniquely important to Affluent Millennials TOP 5 FACTORS OF UNIQUE IMPORTANCE TO AFFLUENT MILLENNIALS 2X AS LIKELY TO BE IMPORTANT TO AFF. MILLENNIALS, VS. AFF. GENX: SOCIAL Company has a page on various social platforms RELATIONSHIP First financial institution you had an account with INFLUENCE Members of your family use the financial institution SOCIAL PRESENCE Company has positive online buzz PURPOSE Company has a community mission you care about
- 18. 18 Affluent Millennials consider social networks a must-have 24% 24% 39% 26% 43% 45% 51% 50% 33% 31% 10% 25%MILLENNIALS GENXERS AFFLUENT MILLENNIALS AFFLUENT GENXERS Must-have Nice to have Unimportant Must-have Nice to have Unimportant
- 19. 19 Social networks are central to Affluent Millennials’ financial decisions COMPARED TO AFFLUENT GEN X, AFFLUENT MILLENNIALS ARE MORE LIKELY TO: 3x 3x 2x 2x Think social networks will be the hub of their financial info in the future Visit a financial company’s page on a social network Use social networks to inform finance / Investment decisions Seek content from financial companies on social networks
- 20. % of affluent users that use at least 1 social network to obtain this type of info 20 Peer opinions, thought leadership and product reviews are top content for Affluent Millennials on social networks 91% 55% AFFLUENT MILLENNIALS AFFLUENT GENXERS 92% 43% AFFLUENT MILLENNIALS AFFLUENT GENXERS 84% 38% AFFLUENT MILLENNIALS AFFLUENT GENXERS P E E R O P I N I O N S T H O U G H T L E A D E R S H I P P R O D U C T R E V I E W S
- 21. 21 Affluent Millennials are especially active on LinkedIn COMPARED TO THE GENERAL POPULATION ON LINKEDIN, AFFLUENT MILLENNIALS ON LINKEDIN HAVE: CONNECTIONS COMPANY FOLLOWS GROUP ACTIVITY SHARES FINANCE TOPIC SHARES 2X AS MANY 13X AS MANY LinkedIn global behavioral data, May 2015
- 22. Q&A 2 2
Notas del editor
- When we set out to do this study, we had three key objectives in mind: First, to understand the generational differences b/n Millennials and GenXers with regard to brand affinity, information-gathering, and decision-making. We also wanted to understand the role that social media plays, particularly with content and context, on their decision journey for financial products. And finally, most importantly, we wanted to understand the unique mindset, behaviors and expectations of the Affluent Millennial subset in particular.
- So why are Affluent Millennials relevant? First, they’re a massive audience, totaling 15.5 million in the United States alone – and they are commanding major changes within the finance industry. On top of $2 trillion they are now spending annually, these Affluent Millennials are recipients of a massive intergenerational transfer of at least $59 trillion in personal wealth over the next 20 years. What makes them so important for financial firms? As Affluent Millennials’ incomes and investable assets grow, particularly given the immense wealth transfer, this powerful generation is uprooting the business models and marketing strategies of today’s financial services providers and demanding tremendous change to the finance industry as a whole. Firms that work now to understand and build lasting relationships with Affluent Millennials are poised for success as this generation’s wealth grows.
- At an overall level, one way we see the unique mindset of Affluent Millennials is in their view of the future Financial Services industry. While most of these views remain a minority across all groups surveyed, Affluent Millennials are especially likely to believe some of these scenarios that may be considered “far-fetched” for the traditional finance industry: They are more likely than Millennials overall, as well as GenXers and Affluent GenXers, to think that there will be a cashless society, that banks will no longer be their primary financial institutions and that there will be a sharing-based economy.
- While they have similar expectations as previous generations that a future financial crisis will occur, Affluent Millennials are unparalleled in confidence. More than half of both affluent groups anticipate another financial crisis, yet Affluent Millennials are significantly more likely to be confident in future economic growth and believe the American Dream* is definitely possible. This confidence for the future is also highlighted in how Affluent Millennials approach their own ambitions: we also saw that they are more likely to agree that the sacrifices they make now will pay off for them in the future. This comes to life especially as they talk about setting goals… **Note: “The American Dream is typically defined as the ideal that every individual should have an equal opportunity to achieve success and prosperity through hard work, determination and initiative.”
- This audience really stands out as particularly ambitious – we know they believe their current work will pay off for them in the future, and to that end, they’re setting some really ambitious life goals for themselves. In general, we see goals varying by life stages (such as getting married or having kids), but Affluent Millennials stood out against Affluent GenXers in a few key areas: they are 3X as likely to have a goal of starting a charitable foundation, and 3X as likely to have a goal to start their own business..
- Interestingly, we see that Affluent Millennials are strategizing the way they finance their goals for the future – one way they’re doing this is by taking out loans. Most notably, they are 7X as likely to have a business loan, compared to Affluent GenXers. When it comes to student loans, this is more of a generational occurrence – but while Affluent Millennials and Millennials are equally likely to have them, Affluent Millennials are more likely to consider these a short-term goal to pay off, while Millennials overall cite it as a long-term goal. Affluent Millennials are on par with Affluent Gen Xers with brokerage account ownership (51%, 53%). Only 1 in 4 Emerging Affluent Millennials ($25K-$100K) has a brokerage account, highlighting the importance for institutions to build relationships early as Millennials grow their wealth. Similarly, 1 in 3 Affluent Millennials has not yet started a retirement account (69% have).
- At the same time, Affluent Millennials are also saving an impressive proportion of their paychecks: More than 1/3 are saving at least half of their paychecks, compared to just 12% of Affluent Gen Xers. Note: While Affluent Millennials are saving a large part of their paycheck, they are taking out loans to pursue their future goals. The reason for the savings + taking loans is part of Affluent Millennials greater finance strategy given current lower rates. Overall, wages are losing dominance as a primary source of wealth; Compared to Affluent Gen Xers, Affluent Millennials are more likely to have gained any of their assets from inheritance (2X), income property (2x), their own business (3X), or their family’s business (4X).
- In terms of how Affluent Millennials are managing their current assets, they are seeking greater control and involvement in their financial decisions. About half of Affluent Millennials self-identify as Validators, meaning that they conduct their own research on investment decisions but validate with an advisor, while the other half are Soloists, meaning they do their own research and also execute trades on their own. Interestingly, despite this tendency to do their own research and make their own decisions, we found that Affluent Millennials are still more likely than Affluent GenXers to consider having a financial advisor a “must-have” – though advisors are often thought of as more popular among older generations. What really comes through clearly is that they are chiefly concerned with making good decisions, whether that means seeking guidance from other sources, or coming to informed conclusions on their own.
- Despite this tendency to do their own research on financial decisions, they are still more likely than Affluent GenXers to value having a financial advisor for guidance.
- Speaker Notes: Once Affluent Millennials are a customer, they are highly loyal to their financial institutions. It is important for financial institutions to start building relationships with millennials early on. More than half of Affluent Millennials with multiple checking accounts hold all these at the same financial institution. More than half of Affluent Millennials are significantly more likely to say they are VERY loyal and plan to do more business with financial institutions they work with. Affluent Millennials are significantly more likely to say they are very loyal and plan to do more business with financial institutions they work with (47%, vs. 27% of Affluent Gen Xers). Affluent Millennials’ loyalty as customers isn't surprising when we see that they are more likely to trust the financial institutions they work with (64%, vs. 52% of Affluent Gen Xers).
- So we know that Affluent Millennials do see value in advisors, and we also found that they are more likely to be loyal to and trust the financial services companies they work with. Despite this, it is critical for financial institutions to be aware that Affluent Millennials are more open to financial offerings from traditionally non-financial brands. One way we already see this exemplified is in their early adoption of NFC mobile payment platforms – in fact, 1 in 3 uses Apple Pay or Google Wallet, which is 3X more than Affluent Gen X.
- We see this potential deviation exemplified by how quickly Affluent Millennials adopted NFC mobile payment platforms that are separate from any traditional financial institutions platforms – in fact, 1 in 3 uses Apple Pay or Google Wallet, which is 3X more than Aff. Gen X
- So for traditional financial institutions who are seeing this potential disruption and looking to build relationships with these forward-thinking Affluent Millennials, some key factors stand out as uniquely important to Affluent Millennials when considering a financial company: Social presence: company has a page on various social platforms. Relationship history: first financial institution you had an account with. Family influence: members of your family use the same financial institution. Online reputation: Company has positive online buzz. Social mission/purpose: Company has a community mission you care about.
- Speaker Notes: We see how important social is when we see that 39% of Affluent Millennials see social networks a must-have, which is greater than overall Millennials with 26% which is really surprising to us because we generally see that as a generational thing. Survey Question: CURRENT_PRIORITIES When you think about the kind of life you want to live in 2015, how do you prioritize the following?
- Not only do Affluent Millennials look for a financial company to have a social presence and visit their page – they truly see social as central to their financial decision-making, and as such, are seeking content and education from financial companies there. Compared to Affluent GenXers, Affluent Millennials are: 3x as likely to use social networks to inform their investment decisions 2x as likely to use social networks to seek content from financial companies
- The top types of content Affluent Millennials are seeking on social networks are: Peer opinions or commentary about financial markets/events Thought leadership content about financial markets/current events Reviews from current customers about financial products and/or services Beyond these examples, we found that overall, for any type of financial information or education they consider relevant to their personal needs, Affluent Millennials are much more likely to acquire this through a social network channel, vs. Affluent GenXers.
- We see all these behaviors come to life among Affluent Millennials on LinekdIn’s platform – particularly when we see how connected and how active they are compared to the average member. They’re sharing twice as much content – and quite notably, 13X as much finance-related content.