According to a Forrester prediction, by 2020, almost half of the world’s adult population would comprise millennials. Even Gen Z is entering the global workforce and would start looking for investing their earnings. In India— one of the fastest-growing economies globally — HNI growth is 6% every year also expected to grow manifold in the next two decades.
As it is common knowledge, India is a young country with about 28% of its population between ages 20 and 35. Since this upcoming new generation of HNIs would be more tech-savvy and digitally inclined, we can expect digital-infused technological disruptions in the financial and banking sectors.
With the continually rising purchasing power of newer generations, there is an urgent need for the finance and investment sector to shift its focus from result-based to goal-based framework.
Gen Y HNIs are more aggressive investors than its predecessors. As they have grown up along with the ascend of technology, they are more digitally capable, well-informed, and educated. Also, they have a higher risk appetite and demand faster results and returns.
The new generation of investors has better clarity and is more dynamic when compared to their earlier generations of investors. Another key differentiator that sets the younger investors apart — more inclination towards current spending than saving for the future. As this generation, investors are still beginners; they rely on their wealth manager to provide them with precise and simple-to-understand financial data to make quick financial decisions.
With an influx of investment options, the current young generation has a lot of variety to choose from to invest their money. As a result, Gen Y tends to prefer a diversified portfolio that consists of novel products to achieve sophisticated asset allocation. Earlier generations were not so adaptive to new products and preferred sticking to what they knew well. Unlike their previous generations, young investors are also open to new and innovative investment strategies and unconventional asset allocations. For instance, a young investor’s portfolio may consist of a balanced blend of equity and debt-based products and a small percentage of the funds invested in the private equity or hedge funds.
As the new-age HNI investors look for faster returns and are ready to make bolder investment decisions, wealth managers also focus on such investment strategies to better cater to this customer base. With the rise of the entrepreneurial millionaires in the past few decades, wealth managers had to adjust to their novel ways of investing. We bring you the following key parameters that will help Gen Y select the right wealth manager:
The expectations and the investing habits would change from one generation to another. With the advent of technology in every aspect of life, the change in preferences and attitudes is quicker and more intense. What is right to Gen Y may not hold good while dealing with Gen Z investors. Hence, wealth managers need to reinvent themselves with changing demands.
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