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Millennials And Money: How NextGen Glance At Wealth

According to Accenture’s Wealth in the Digital Age Investor survey, each and every generation has the capacity to influence the economy, however, millennials have a special impact as they are the most digitally savvy investor group overall.

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We live in the digital era, where all of us are one step away from accessing information about anything in the internet world. The present world is all about high-speed technology and instant Google answers, and hence millennials like to have their investment information to be immediately accessible.

According to Accenture’s Wealth in the Digital Age Investor survey, each and every generation has the capacity to influence the economy, however, millennials have a special impact as they are the most digitally savvy investor group overall.

Ashraf Rizvi, Chief Executive Officer (CEO and Founder, Gilded, said, "Millennials are driven by their ambitions and believe in leading a financially independent lifestyle. They have a holistic approach towards every aspect of life including wealth management, as compared to their parents who relied solely on financial advisors, traditional institutions and focused on saving and building a comfortable money-nest to retire, with limited exposure to risks. Millennials are digitally savvy investors and are willing to take risks and explore new-age approaches to investment opportunities. They value speed and superior experience while utilising a service or product.  With the increasing internet and smartphone penetration, every task can be completed at the click of a button, even when it comes to managing finances. The large-scale adoption of new and innovative wealth-tech offerings in the country, for whom a significant number of users are millennials, is a sign of their willingness to experiment, take calculated risks, and take charge of their own finances."

A new era of wealth management: 

In the present world, millennials are considered as driving and catalyzing the next revolution in wealth management. The growing interest in new-age access to investment options. 

Millennials are also influencing the wealth management space as both the older and younger generations are witnessing the advantages digital investments offer and the following suit.  To sum up, the shift is largely from physical to digital wealth management ways, with speed, customer experience, transparency, and safety is the key focus, Rizvi mentioned.  

Millennials, financial shocks or adversities, and COVID-19:

Talking about the millennials, and the ongoing Coronavirus pandemic, Rizvi said, "This depends on the kind of investor one is; a highly aggressive investor who has put in all their money in volatile assets such as single equities or crypto is bound to lose out during an unprecedented event when market sentiment usually takes a dive. Whereas, a youngster who believes in having a balanced investment practice and may have initially parked money in FD’s, savings, or digital gold, apart from aggressive assets will be better off to navigate through such periods. That said, this pandemic did teach us the importance of having an emergency fund in a stable store of value or having money parked in stable and risk-free assets. I am confident that the younger generation will learn from this experience and allocate their assets accordingly."

Technology influence on investment:

The present generation is heavily technology-driven and relies on tech for almost all aspects of their lives, for example, shopping, communication, finance management, education and so much more.  

"With improved data offerings and connectivity, in the country, even in Tier II/III cities, they have more exposure on how to go about their financial management, experiment with apps that enable this, and stick to them if found helpful. With advanced technology, we can offer wealth-tech apps that better services to our users, also inform and educate them about managing their finances better and this will definitely drive the way finances are managed by our young investors," Rizvi said. 

Money management practices of millennials:

He also emphasized how have the money management practices of millennials changed in the last few years. He said the shift has majorly been in terms of transitioning from a traditional institutional setup, where dedicated professionals and physical institutions were managing your money, to currently a more digitally-oriented, hands-on approach to managing your own money.  

Another major shift in how money is now viewed, earlier money was kept lying around in savings accounts, earning a meager 2-3 per cent interest rate, to feel psychologically secure. Now, with more awareness and information available about personal finance, millennials are putting their money to work for them, early on in their careers. Hence, instead of saving and building a nest, the focus is now more on multiplying wealth.   

Talking about how is Gilded making a difference in the present world, he said, "Gilded enables users to buy, hold, sell and gift gold in whatever amounts or quantities they choose, meaning, since it is a digital record of the purchase. One can buy gold for as low as Rs.100 which was never known to a traditional gold investor. A key advantage is the ability to invest in digital gold in a fractional manner at a low cost, which Is not possible in the case of physical gold."

It has been said that digitally-enabled investment options such as digital gold can replace the traditional investment tools for the next generation of investors.

Next-generation of investors:

Rizvi said, "It is still early in the days to predict what a product like digital gold shall replace, although, as seen historically, things are moving from traditional/physical mediums to online/digital mediums. Hence, it would be safe to say that while Gold will still hold the same sentiment and value, the way we buy and sell it may change from physical to digital ways,  

The rates of interest have significantly come down from the earlier 9-10 per cent to 5-6 per cent, which is a cause of worry since that’s an average inflation rate in the country. While being safe is important, investors have to keep a watch for negative returns, since money locked in an FD with a 5 per cent annual return, in an economy where inflation rates are crossing 6 per cent, is losing out on precious value.  

"Keeping this in mind, as people become more aware, they may choose another equally safe option, such as digital gold, which has offered returns as high as 15 per cent or more over the long term. And since the gold value isn’t related to market sentiments and is often inversely related, any kind of unprecedented event will only lead to overall gold value rising, as witnessed during the initial days of the lockdown induced by COVID-19," he said.  

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millennials money NextGen wealth