Stepping Up to Meet the Needs of Millennials


Stepping Up to Meet the Needs of Millennials

Innovation essential to respond to the needs of tech-savvy and socially conscious investors

July 2019, SINGAPORE - From Australia to Singapore, millennials are becoming more than just buzzwords. Tech-savvy and socially conscious, they are driving two key themes in the asset management industry–digitalization and sustainable investing. Asset managers are taking note of the trends and responding, but there is more that needs to be done.

In Southeast Asia, a region with one of the world’s youngest populations, fund managers are expanding their distribution networks through partnerships with e-commerce and e-wallets, while more distributors are setting up digital banks. Similarly, in China, managers are putting efforts into collaborating with leading platforms and exploring ways of converting huge flows into assets. Some of these platforms have the highest number of new accounts among all distribution channels, with most of these new accounts belonging to millennials.

In Australia, newer superannuation funds are being marketed to attract younger investors, although in substance they may not differ much from mainstream funds. In India, the strong regulatory push towards using online channels for mutual fund distribution has resulted in a proliferation of options over the last few years. Starting with the MF Utility System and exchange-based platforms, the digital journey has moved ahead, with fund houses and distributors introducing websites and apps, and both fintech and non-fintech firms launching robo-advisors and online portals. Given the wealth aspirations of the young, there are significant opportunities for the industry to target potential first-time investors of mutual funds.

The journey has just begun, as the industry needs to constantly innovate their digital platforms and marketing strategies. “The industry also needs to understand that millennials could influence the decisions of their older family members and encourage them to carry out digital transactions. Hence, effective and unique digital strategies are essential for both fund houses or distributors. Moreover, performance is key, as information availability may increasingly lead young investors to question underperformance,” says Leena Dagade, an associate director at Cerulli Associates.

The industry needs to understand what millennials want. Although they are still in the wealth creation phase currently, there is huge potential for wealth to be transferred to this generation. Millennials are already reshaping the financial services industry through their digitalization needs, and in future, could play a pivotal role in raising asset managers’ involvement in sustainable investing. As they gain more wealth, and increasingly become socially conscious, they could seek investments that have positive social implications. “As this trend unfolds, managers will need to embrace sustainability and have more engagement with their investee companies to create a positive impact,” says Dagade.


These findings and more are from: The Cerulli Edge―Asia-Pacific Edition, 3Q 2019 Issue.

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