Another senior private banker talks about how the industry should think of Millennials and their needs.
Millennials are impacting the financial industry. Their views and demands are starting to force institutions to take notice. The generation are looking to revolutionise the way banking is done, in terms of technology and the investments made. They are seen as a collective group rather than split up into men and women.
The next generation has become the fashionable demographic to report on, compared to women in wealth management, Annabel Bosman said recently to this publication.
Even so, there is room for disagreement about the specifics. Tracey Reddings, Julius Baer International head of front office, told WealthBriefing recently that Millennials should be seen as a collective group because the different sexes have similar values.
“Millennials should be viewed as a group and not split by gender,” said Reddings. “At the end of the day, what you want is strength, determination and focus, and being clear about what it is what you want to achieve. It really should not matter whether you are a man or a woman, or where you are from. We have some interesting publications that we share with our clients, and one of those was very much focused on Millennials and what was interesting from that was, we did some case studies with young CEOs and when you listen to their stories, whether male or female, their drive and determination is very similar, as well as what drives them with their values and beliefs.”
In 2016, Boston Consulting Group predicted that women will control 75 per cent of discretionary spending around the world by 2028. There is therefore a possible reason to give female Millennials a separate voice than part of a collective, as women will have more control over wealth in the world over the next decade.
But, by looking at Millennials as a whole, the financial industry can find it easier to appeal to the generation. And Reddings told this publication what Julius Baer is doing to appeal and educate the next wealth holders.
“Wealth transfer from baby boomers to Millennials is expected to be around $3 trillion in the next decade,” Reddings added. “We spend much time with the children and grandchildren of our baby boomer clients, influencing them in how they should be thinking about the management of wealth. For example, we are going to be hosting an event called Gen Y in September aimed at the children and grandchildren of our clients. The mix of topics in that event span from an introduction to financial markets to the lifecycle of an entrepreneur, through to having inspirational speakers who themselves are trying to shape the world. By doing these sorts of events, we bring them together with their peers, but also with other inspirational people, who they can learn from”.
One cannot mention Millennials without talking about their demand for technology. Their demand has intensified the already driven nature towards fintech. According to the Deloitte Millennials and Wealth Management study, 80 per cent of this population cohort own a smartphone, and at least half of Millennials want to use one for their financial planning, according to Legg Mason. Reddings spoke about how the rise of Millenials has increased the firm’s development of fintech and what it hopes to do to attract the new generation of wealth holders.
Reddings, who joined the firm in May 2017 from JP Morgan, where she was managing director of its UK private wealth operation for almost six years, added: “I think it means in terms of both how we develop and deploy technology in terms of e-banking, and in how we communicate with our clients through social media. The interesting thing that is different with Millennials vs previous generations is that their solution is to deploy their trust horizontally rather than vertically."
"They believe in the wisdom of the crowd and take collective information and recommendations from a broad base of sources through social media, and make their judgements about what they want to do; see now buy now, which is very disposable. So we need to think how we communicate our messages online with social media. This is all part of the vision 2020 that Julius Baer has, that ensuring our digital strategy is one that plays as much to the next generation of private clients as it does to the current generation," she said.
Recently, during an interview with this publication Lombard Odier UK chief executive, Duncan Macintyre, said the firm was not looking to openly employ Millennials to work with clients. However, Reddings believes the growth of the firm is about how it deals with employing Millennials and it looks to increase diversity amongst the ranks.
“One of my responsibilities in joining the firm is about helping to grow the UK business and that includes the hiring of the next generation of wealth advisors,” said Reddings.
“We have a strong desire to ensure that we have diversity in our workforce. When hiring the other thing we have to bear in mind when it comes to Millennials in terms of their attitudes and their behaviours is that they are impatient in nature, that’s whether as a client or an advisor within a bank such as ours, we now have to think differently about the career of the next generation of relationship managers and what drives them. Our next generation investment strategies increasingly need to be about investing in the things that Millennials care about. From our perspective, we need to think about how we get our message across, and how our brand is perceived by the next generation, so we can attract the best talent. We blend a balance between heritage and stability with forward-thinking and innovation which is demonstrated by not only how we manage money for our clients, but also how we think about we think about supporting the next generation," she added.