Asset managers instinctively see such research outcomes as alarming, prompting them to say: ‘Let’s educate them!’ But, as any secondary school teacher can tell you, it’s damned hard to teach students if they don’t have the slightest interest in the subject you’re trying to tell them about. Most millennial respondents to these surveys probably only fill them in because they are given the chance to win a MacBook Air anyway.
Investing really is the last thing on the mind of most 26-year olds – currently the median age of the millennials. Most of them live from one payslip to the next anyway, hence their short-term investment outlook. This is really nothing new under the sun. Even if they have some money to spare, young people tend not to think too far ahead. This could of course change, as they grow older, as was the case for previous generations.
So instead of fretting about millennials’ mismatch between their return expectations and their investment attitudes, asset managers had better occupy themselves with the question how to engage with a new, trend-setting generation of young, digital savvy investors. Digital natives are increasingly less likely to take face-to-face advice, turning to investment platforms and so-called robo-advice instead. While most asset managers now mostly reach their (older) end investors through intermediaries, this will not be as straightforward with the younger generations.
So they’d better get on with it. Before long, everybody will be a millennial.