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Baby boomers are, being mostly retired or close to retirement, slowly descending the investment stage and making way for the next generation in line: The Millennials. Every generation is different and sometimes moved by stimuli completely opposite to the previous generation due to the change in circumstances, the economy, and because they all want to leave a mark on the world of investment.
This means that you shouldn’t be surprised if your old strategies for attracting investors don’t work anymore – your audience has changed completely and it is in their nature to expect a customized approach. To help you understand Millennial investors better and create effective strategies to approach them, here are some generation-specific ways they observe the world of investment.
Insisting on transparency
If you wish to attract more millennials to your investment company, you have to behave as they do – strive towards building trust and the best way to achieve that is being transparent. They wish to know exactly where their money will be going and they wish for regular updates about the state of their investment.
Their idea of investment isn’t putting their money towards an indefinite goal and having somebody else manage it but instead, they wish to actively participate and be in the loop about every decision. In business, they prefer flat-rate models, as opposed to baby boomers who gladly embraced a commission-based pay model. So, you need to be clear on the fees, build a relationship by staying in touch and customizing your pieces of advice and information.
Contributing to impact investing
Millennials’ investment goals are not necessarily purely financial. They are increasingly involved with impact investing which basically means that they are investing their money not only for the sake of financial gain but also some higher cause. They deeply care about the environment and social groups who live in poverty so they focus many activities, from recycling to impact investing, to creating a positive social or environmental impact.
You will often see them participating in crowdfunding projects and supporting financially, as much as they can, startup ideas which offer solutions to some environmental issues or which empower or employ vulnerable social groups. Investments in, for example, the tobacco industry, may not be millennials’ first choice because of their negative effect on people’s health. For them, it’s not just about the money – they also need to believe in the idea behind the investment.
Leveraging on technology
Millennials have long ago started using technology to make their lives simpler in almost every aspect. They use it to save time and do a lot of things over the internet, such as shopping, invoicing, educating themselves, as well as doing business and investing. In recent years, there is one exciting investment field which has been slowly taking over the business world and that is: cryptocurrency.
Many businesses have introduced BTC and other cryptocurrencies as a payment method on a global scale which encouraged millennials to invest in cryptocurrency mining rigs with the aim of ‘earning’ BTC or other (crypto)coins. The appeal of mining BTC for Millennials lies in it being a decentralized digital currency which, once mined, can be sent to anyone without a need for a bank or any other institution as an intermediary. So, to leverage this trend, you need to provide them with the option to invest the cryptocurrency they mined into your prospect.
Relying on themselves
While baby boomers held tight to steady jobs and climbing the corporate ladder fervently and gradually, Millennials are more about breaking the ladder and reaching the peak using their own strategies. They are also highly independent so they often go solo into the waters of entrepreneurship. They deal with risk much better than the previous generations and are willing to switch several professions until they finally find their place in the business world.
When it comes to investing, this desire for independence and courage reflects on them being wary of financial advisors. A study showed they believe advisors care mostly about their own profit and interests so if you wish Millennials to invest in your prospects, you have to let go of the go-between person and you yourself answer all the questions and dedicate your time to making that relationship work. As mentioned, you need to present them with all the details and ensure everything is transparent if you want to keep them on board.
Wrapping up
As financially sound adults in their business prime, Millennials are the generation you need to tailor your strategies to, to have them invest in your products, brand or idea. They are independent creatures who enjoy researching on their own and don’t mind mixing things up a bit and changing until they get exactly what they wish.
Catering to their needs often means orienting your business towards socially responsible goals, and changing the investment process, such as introducing cryptocurrencies as a means of investment. Your task will not be finished once they invest with you – you would need to actively work on gaining their trust by way of transparency since they will often first invest a smaller amount, just to see how it goes. All in all, millennials are not a demanding generation of investors but if you want to win them over completely, you will need to adapt certain things to suit their interests.
