Young people are gradually becoming investors and their needs and wants are different from their older cohorts.
And they are set to come into the limelight increasingly in the years ahead.
In the next 30 years the next generation of investors are set to inherit up to $30 trillion in assets from Baby Boomers – 50 per cent more than America’s GDP in 2019.
And COVID-19 has caused many younger people to try entering stocks for the first time, facing near zero interest rates and unstable employment amidst the pandemic.
The latest ASX Australian Investor Study found 27% of respondents who planned to invest in the next 12 months were aged under 25.
So it’s clear they cannot be ignored. And it cannot be assumed they want the same things as previous generations.
Young investors have aligned with increasing investment in ESG and it has been a common stereotype that they don’t really care about money.
But the increasing funds by institutions and high net worths going into ESG and in some cases, those investments showing better financial returns than non-ESG funds, puts that theory to bed.
Nevertheless, young investors do have their own unique needs and that ASX is home to a handful of companies that are targeting them.
One of these is financial wellness fintech Douugh (ASX:DOU). Last week it launched its “Goodments by Douugh” app enabling investors to trade fractionalised shares in global companies from as little as $1 and without commission.
Douugh says the launch of Goodments is a precursor to its banking app.
How young people want to invest
Both apps seek to capitalise on the record number of young investors (or as Douugh calls them, “millennials and zoomers”) seeking to build wealth in shares as well as crypto.
“Young people realise buying property is becoming increasingly difficult so they are turning to shares to make their money work harder and save to secure their futures,” said CEO Andy Taylor.
“Cryptocurrencies have also created interest in the younger generation, who want to invest with a long term strategy.
“It’s driving demand for wealth creation platforms like Goodments to simplify buying and selling shares, making it easy to get involved, easy to use and low cost.
“All the while being able to get exposure to the biggest global disruptive brands they know and love that are changing the world.
“Millennials want to do the investing autonomously with some guidance through an app rather than a broker and pay their fees.”
Another couple of investing platforms, listed on the ASX, are Raiz (ASX:RZI) and Domacom (ASX:DCL). The latter of these also assists with fractional property investing.
There are several other platforms that aren’t listed on the ASX, including Robinhood, Spaceship Voyager, Stockpile, Betterment and Stash.
Young investors also want to bank differently
And it’s not just stock and crypto investing where young investors may be more open to something different.
A deVere Group global poll last week of all its clients born between 1980 and 1996 found that 59 per cent either use digital banking services only, or are planning to make the switch this year.
Nigel Green, the CEO of deVere Group, attributes this to young investors growing up as the technology developed.
“They’ve been influenced by the enormous surge in tech as they came into adulthood, which came around the same time of the global financial crash that hit in 2008,” he said.
“Against this backdrop, they seemingly became comfortable using fintech [financial technology] to help them access, manage and use their money rather than using a traditional bank.
“Mobile-first millennials expect easy, immediate access and control of their finances in the palm of their hand. They demand to be able to transfer money and pay bills in one tap or swipe. They want to be able to review their spending habits, be offered guidance, and have real-time access.
“In most cases, ‘too big to fail’ traditional banks are struggling to keep pace with the tech innovations that are now driving shifting customer expectations.”
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Originally Appeared Here