This article was originally published in Paperjam. Read the article here (in French)
Millennials will be the largest segment of the adult population at the end of the decade, with a combined global wealth of up to $24tn, according to Deloitte. For virtually every company, working-out how to engage with Millennials is integral to their long-term sustainability.
Millennials came of age in the financial crisis meaning that, compared to earlier generations, when it comes to money they are more values-orientated; cautious; and collaborative with peers – actively seeking their advice alongside that of professionals. However, this is where the similarities between wealthy millennials diverge – some are inheriting wealth passed down over many generations, whilst others are either making their own fortunes or inheriting recently established legacies.
New challenges for wealth managers
Millennials create greater challenges for wealth planners than previous generations – from appearing relevant, to establishing regular engagement in a way that suits their new clientele.
“Millennials tend to rent rather than own, care more about experiences than possessions, (exemplifying their values-based approach to life) and they live more mobile lives than their predecessors, making extensive use of technology and the web to test third party advice,” says Andreas Seiwert, Wealth Planning Manager at Lombard International Assurance.
According to the RBC World Wealth Report, wealthy millennials are often familiar with the concept of wealth management. They may even have established relationships with family advisers. Following the financial crisis, they’re much more research-orientated and engaged in their financial affairs.
Entrepreneurial millennials can build fortunes outside their ‘home’ or ‘retirement destination country,’ creating challenges in repatriation. In this, Seiwert thinks millennials might be missing-out:
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“They’re often too busy making the cake to think about how much of it they may lose if its consumption is poorly planned.”
Seiwert advocates life assurance policy structures as a potential solution that can help millennials safeguard not just the legacies they inherit, but those they might create.
Using a globally accepted long-term savings structure to house existing assets, -and growing assets during their accumulation phases- creates the ability not just to see more of that cake, but could also mean it is substantially bigger. The flexibility offered by life assurance structures caters for a wide variety of assets, including unquoted businesses and enables millennials to live and work where they wish.
Winning the conceptual argument with millennials is only half the challenge: the other is service delivery. Millennials want clear and easy access to portfolio information on demand, saving interpersonal engagement for more significant moments in their wealth planning journey.
“Lombard International Assurance currently provides service through the Connect platform,” says Seiwert, “which enables clients to review their policy on the go. It’s an area Lombard is making substantial investment in. New iterations of the platform will bring greater fidelity to clients and their wealth advisers, making the service Lombard can offer even more flexible." .