Millennials are the largest generation in United States history, consisting of over 90 million people. This generation, born between 1980 and 2000, is set to inherit an estimated $30 trillion within the next several decades. Subsequently, millennials are already influencing financial markets and are set to continue changing trends in the foreseeable future.
So, how can you attract millennial investors?
The short answer is to lead with purpose.
Studies show that this social-minded generation want their financial decisions to align with their ethical values. In fact, compared with other generations, millennials are twice as likely to invest in sustainable financial products.
What’s more, Morgan Stanley found that 86% of millennials are curious about socially responsible investing and twice as likely to make an investment if it includes both financial and social or environmental upside potential.
Consequently, sustainable investments have grown at a rapid rate of 33% from 2014 to 2016 and now make up 22% of assets under management in the United States.
Ultimately, if you are a business owner or an asset manager you must communicate the societal benefits as well as financial potential of investment opportunities when speaking with millennials.
Let’s look at some specific ways you can attract millennials to invest in your business ventures:
Utilize digital platforms: as much as they are socially driven, millennials are digitally connected. Therefore, it is essential to create online investment platforms that work seamlessly on mobile, tablet and computer devices.
A brand doing great work connecting socially responsible investing with a digital first platform is Grow. The company’s millennial-focused app offers users financial products with high Environmental, Social, and Governance ratings (ESG) as well as financial metrics.
Ultimately, whether you are selling financial products via a third-party or direct to consumer, it’s important to present them in a technologically seamless fashion.
Share impactful stories: It is essential to communicate the stories behind your venture’s social values.
No matter how much good your business or investment opportunity creates, if you don’t properly share your journey and contribution, no one will know about it and therefore it will not help your competitive advantage.
A company that did an excellent job of sharing an impactful story to engage millennial investors is Santander Bank. The Spanish Financial services provider created a short sci-fi film called “Más Allá Del Dinero” about a young woman who sells her memories for cash only to realize that there is more to life than money. The film received widespread publicity; Santander experienced the fastest signup rate in 160 years and reached 35 percent of its annual business goal within 2 weeks of the debut.
Essentially, it is vital to your brand’s social image to tell meaningful stories that contribute to cultural conversations.
Ensure clients understand financial metrics: as important as it is to position your brand as a force for good to attract the millennial investors, it is equally important that your financial products make good financial sense.
Much of millennial wealth will be inherited from older generations, who are not as motivated by social impact.
A recent study conducted by Toniic and Bank of the West found that millennials often feel the need for approval from parents or grandparents because they inherited their wealth from them.
Additionally, the study found that millennial’s sometimes feel confused or do not understand financial jargon or how to analyze asset offerings.
Fortunately, social responsible investments tend to show a positive correlation with financial performance. In fact, the Morgan Stanley study found that investments with high ESG ratings performed as well or better than traditional assets and experienced less median volatility over time.
It follows that it is essential to present information in a easy to understand fashion and ensure that your millennial clients can effectively communicate investment criteria such as price earnings ratio, profit loss statements, and how to assess a quarterly earnings report.
In this way they will feel more secure about the financial stability of their assets and more empowered to defend their investment decisions to skeptics and other generations.
The key takeaway is that to attract millennial investors you need to connect with them in a way that they are most comfortable with, tell compelling stories and communicate how your investment opportunity will provide them with social and financial returns.
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