Digitalisation of Wealth Management

Wealth management insights: Younger investors looking to alternatives, ESG and ETFs

Sarlota Hohwald

Director, Content Solutions Wealth Management Platform

Gen-X and Millennial investors seek a broader range of modern investment products from wealth firms, our latest report shows.

  1. Younger investors are looking for innovative, sustainable and efficient ways to invest, according to a new Refinitiv report.
  2. If wealth managers don’t adapt to these shifting requirements, they risk losing investors in this age group.
  3. Providing insights covering ESG and ETFs – backed by trusted news and innovative technology – can help wealth firms to differentiate their offering and stand apart from the competition.

Younger generations of investors continue to disrupt the wealth management industry with their changing preferences. While Baby Boomers remain happy with traditional methods of investing, Gen-X and Millennial investors are increasingly looking for investments that are more sustainable, efficient and innovative.

Our latest report, Bridging the generation gap: Five ways to attract investors and create competitive advantage, reveals this clear divergence between Baby Boomers (aged 57+), compared to Gen-X (aged 41-56) and Millennials (25-40). Our survey of more than 1,000 retail investors found a contrast as younger investors turn to index-based funds, ETFs, cryptocurrency, environmental, social and governance (ESG) investments and hedge funds.

Refinitiv Investor Solutions: Our flexible and intuitive digital solutions provide investors with the insights and tools to invest with confidence and maximise their financial wellness.

Changing investor tastes

We are witnessing a shift in wealth to younger generations – whether through their earnings or inheritance – which makes their investment choices increasingly important for the wealth management industry. It’s clear to see how different their attitudes and preferences are.

More than half (53%) of Millennial investors would like to receive information about index-based funds and ETFs, as would 42% of Gen-X, according to our research. Whereas just over a quarter (28%) of Baby Boomers express interest. There’s a similar pattern across different forms of crypto investing, real estate investing and sustainable/ESG investing.

Gen-X and Millennials more likely to want information about alternative investments

Which of the following areas are you interested in receiving information about and/or discussing with your advisor?

These results indicate that wealth firms must be mindful of their investors’ preferences and adapt their product offerings accordingly.

Insights that differentiate

With younger investors more interested than ever in alternatives, ESG and ETFs, wealth firms can differentiate their services to gain competitive advantage, by providing personalised data, insights and education.

For instance, ESG investing is becoming part of the mainstream, but judging its opportunities and risks requires extensive information. That’s why we have built the most comprehensive ESG database which helps wealth firms integrate ESG factors into investment workflows. Wealth advisors can screen over 80% of the global market cap across hundreds of ESG metrics, making more informed investment decisions and giving investors better insights.

Turning to ETFs, our survey shows that investors would like to receive more information about these from wealth advisors. ETFs offer a growing number of ways to diversify, take advantage of opportunities and navigate risks. Refinitiv ETF Reports Plus delivers proprietary fund ratings, easy-to-digest reports and unique insights to engage investors and forge stronger relationships.

Refinitiv Advisor Solutions: Discover the data, technology and digital tools we provide to help wealth advisors improve efficiency and deliver tailored advice to every client.

Cutting-edge news and analytics for a competitive advantage

As investors look for a broader range of investment opportunities, providing valuable advice that’s backed by relevant, real-time intelligence is crucial. The ability to combine reliable news and data, the right digital tools and tailored insights present a powerful competitive advantage.

Our news and analytics service provides just that: global news coverage from the world’s most trusted news brand – Reuters, personalised data and AI-driven analytics. Our news service delivers relevant information – including exclusive news alerts, stories and insights in real-time – which helps drive efficiency and increase productivity. With an overflow of information in financial markets, this service can be a significant differentiator for wealth firms.

Adapt to younger generations for future growth

Our report confirms that there’s a shift in investor preferences underway, as younger generations become wealthier. That means wealth managers need to offer a broader range of modern investments, backed by reliable, real-time insights and digital capabilities.

The wealth firms must appeal to Gen-X and Millennial investors if they are to prosper. Our report highlights the scope for wealth advisors to do so by differentiating themselves through alternative, ESG and ETF data.

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