According to the latest edition of EY's Global Wealth Research Report, younger investors are more actively responding to and being influenced by external market factors. The report captures the views of over 2,600 wealth management clients worldwide, including 600 from Europe.
The report found that more than a third of European millennials (38%) are moving towards higher-risk investments, compared to just a quarter (24%) of baby boomers (those born between 1946 and 1964). Despite the fact that more than half (57%) of millennials, compared to 35% of baby boomers, said their investment needs have become more complex.
The demand for professional advice to understand the economic, market, and political disruptions is increasing amid prolonged economic uncertainty. However, the demand in Europe is lower than the global average. According to a survey, 38% of European millennials and 34% of baby boomers actively seek advice from their financial advisor to deal with the effects of political instability or uncertainty, compared to 42% and 33% respectively at a global level.
The report also revealed that over half (51%) of European millennials regularly seek additional independent financial advice in response to volatility affecting their portfolio, compared to 58% globally.
In terms of their preferred channels for advice, 47% of all European investors want to talk to their advisors online, 30% choose face-to-face contact, and 23% turn to apps. This finding differs significantly from the previous edition of the report in 2021, where online advice was chosen by just 14% of European customers.
The report's findings indicate that younger individuals are more willing to switch their asset management providers or move their money from one provider to another. In European markets, millennials are almost twice as likely to switch providers, add a new wealth management provider or move money, with 71% of them being open to this idea, compared to only 32% of baby boomers. This trend is also observed globally, with 73% of millennials planning to switch, add a new provider or move money from their current provider within the next three years, compared to only 29% of baby boomers.
Moreover, there has been a rise in investments in new asset classes, such as digital products and cryptocurrencies, as European investors are increasingly turning to technology and innovative services provided by FinTech and alternative products. It is noted that the demand for professional advice on these asset classes is also higher than that for traditional classes. Additionally, it is expected that investor engagement with FinTech companies will grow by 12% over the next three years.
