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A new way to attract young investors to financial advice

Justin Taurog, VitalityInvest Deputy CEO

Updated: 22nd December 2020

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Capturing the market for Millennials is the holy grail of financial services

According to Pew1, a Millennial is anyone born between 1981 and 1996 – someone currently in their 20s or 30s. This is the generation that is just starting on their savings and investment journey and who will also, in the not too distant future, inherit the wealth of their parents. This makes them not only potential advice clients in their own right but, as they inherit their parents’ wealth, they may well inherit their parents’ wealth manager or financial adviser too.

Even for advisers who don’t expect to be in business for that long, bringing younger investors on board lowers the average age (and hence potential future value) of their client book.

The pre-40-year-old generation have different lifestyle expectations to their parents 

Work-life balance is important and (as a generalisation) they tend to have low levels of trust in established organisations. According to Deloitte's Millennials Survey2, only a minority of Millennials believe businesses behave ethically (48 percent vs 65 percent in 2017) and that business leaders are committed to helping improve society (47 percent vs 62 percent in 2017).

On work-life balance the sentiment is clear; 47 percent of Millennials envision leaving their jobs within two years; only 28 percent seek to stay beyond five years. “Attracting and retaining Millennials… begins with financial rewards and workplace culture” according to the report.

Millennial use of technology

The good news for advisers is that although Millennials are very tech-savvy, Accenture’s research3 uncovered that only 11 percent currently use a robo-adviser exclusively, leaving plenty of room for human advisers to show their value. Already, nearly two-thirds of Millennials that seek advice use some form of hybrid model.

The Inkling UK Millennials Report4 shows that tech is now increasingly being used by Millennials to help bridge gaps in all areas of their overall wellness and bump up happiness levels (and not just to count calories). This resonates with as much as 68 percent of UK Millennials, who believe that technology will play a bigger role in their health and wellness in the future than it does at present.

So we have a new generation of potential wealth clients, many of whom will need advice, who carry a suspicion of traditional financial methods and organisations, are tech savvy and highly value their wellness.

The VitalityInvest approach

We believe the VitalityInvest approach taps in to all the behavioural challenges associated with wealth management among the younger generation. The use of incentives and subsequent rewards mean investors can see immediate value, not just through everyday benefits like cheaper gym membership and weekly coffee, but in the medium term too, through monetary boosts to their pension or ISA on top of their investment returns.

The behavioural effect of regular rewards for monitoring and maintaining a healthy lifestyle, and aiming for that next investment boost, should also make it easier for the adviser to encourage them to persevere with investing. Getting individuals on board at younger ages also gives advisers the opportunity to promote other financial products relevant to their life stage.

For advisers willing to consider an even longer time horizon, Junior ISAs allow them to create relationships extending to under-18s – those who will ultimately branch off to become independent investors in their own right.
With VitalityInvest, Junior ISA costs will reduce as parents become more engaged in looking after their health. So they are making an investment in their child’s future, while at the same time becoming healthier and so increasing the amount of time they will have together with their family as their life expectancy improves. It demonstrates the importance of looking after your health and your finances.

As investors’ expectations and needs change, so should the products available to help advisers better engage with the next generation. Performance still sits at the heart of a good investment. But increasingly performance needs to be part of a more relevant lifestyle package in order to win and keep new investors. The next generation expects it.

Find out more about VitalityInvest.

1. Pew Research, 2018:
2. The Deloitte Millennial Survey 2018:
3. Accenture report, 2017:
4. UK Millennials Report 2018:

For investment professionals only. VitalityInvest is a trading name of Vitality Corporate Services Limited. Vitality Corporate Services Limited is authorised and regulated by the Financial Conduct Authority.