The research that involved survey of more than 1,000 US investors revealed that convenience and online tools are key reasons for Gen-Xers and Gen-Yers to shift assets between financial institutions.
The research stated that with more than US$40 trillion expected to transition to younger generations in the US over the next several decades, wealth management firms will need to focus on this new wave of investors and reevaluate their current service, support and technology models.
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Further, it was bought that financial institutions that can understand and address the unique investment needs of this emerging segment will be best positioned to capture their future wealth.
"Gen-Xers and Gen-Yers have been far less loyal to their investment providers over the last few years compared to Boomer and Silent Generation investors, indicating that young consumers have yet to find their ideal investment providers," said Sophie Schmitt, Aite Group senior analyst, wealth management.
"Banks seeking to maximize their ability to retain and grow share of wallet with young investors should work on growing their online investing capabilities and providing more convenient services," Schmitt added.
While 40% of young investors still consider a bank to be their primary investment provider, only 20% of young investors consider an online brokerage firm to be their primary investment provider despite their strong adoption of online trading.
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By GlobalDataAdditionally, 44% of Gen-X and Gen-Y investors surveyed shifted assets to another investment firm or switched investment providers due to availability of online tools.
42% of Gen-X and Gen-Y respondents said their bank would need to offer more convenient services and/or more robust online brokerage/trading capabilities in order for them to move more assets to their bank.
About 30% of young investors trade more than 25 times per year and slightly less than 70% trade online more than five times per year.
