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Generation D: An emerging and important investor segment

A new Accenture survey reveals why the digital generation, or “Gen D” investors, are an important emerging market for financial services firms.

Overview

The digital generation—Millennials in particular—represent an important emerging market for financial services firms. A new Accenture survey reveals how Gen D investors approach wealth management.

The financial crash and the rise of digital and social channels have changed how consumers view the financial community and approach wealth management. A new group of investors—one defined by behaviors rather than traditional demographics—is emerging.

In 2012, Accenture conducted an online survey of more than 1,000 current and future investors to better understand this digital generation. Learn more about Gen D behaviors, preferences and attitudes toward financial advisors in this summary report.

Background

The financial crash has made investors distrustful of the financial community, particularly banks and financial advisors. At the same time, the growing use of digital and social channels in everyday life is beginning to influence how consumers interact with their financial services providers.

Examining these trends more closely, Accenture identified a significant investor segment that is defined by its behaviors rather than traditional demographics. In 2012, Accenture hosted a series of focus groups in New York and Los Angeles, and conducted an online survey of Millennials, Gen-Xers and Baby Boomers, to learn more about this digital generation, or Gen D.

Key Findings

A 2012 Accenture survey of current and future investors revealed three key findings:

  • Gen D is a vitally important group of investors. In the United States alone, this new market segment numbers more than 75 million and holds nearly $27 trillion in assets. Although Millennials account for just 5 percent of Gen D assets today, an estimated $30 trillion in assets will shift from Baby Boomers to their heirs over the next 20 to 30 years.

  • Confidence in financial advisors is eroding. Many Gen D investors perceive financial advisors as salespeople who push products that enrich their firms rather than their clients. Of the 59 percent that recently sought financial advice, only 40 percent looked to a financial advisor.

  • Investors are seeking information to mitigate risk. Gen D investors, particularly Millennials, want to understand the risks and benefits of different investment vehicles before making decisions. Over half sought financial advice from someone other than a financial advisor—including family, friends and social media contacts—in the past two years.

Analysis

The digital generation represents a significant market opportunity for financial services firms, but few organizations possess a strong understanding of this emerging segment or are currently equipped to build robust relationships with Gen D investors.

Accenture believes that firms can improve their prospects by taking action in three key areas:

  • Finding, attracting and retaining Gen D clients

  • Adapting customer experiences to suit Gen D expectations, behaviors and preferences

  • Defining a new role and identifying new tools for financial advisors in the digital age