We believe the changing attitudes of millennials towards saving are helping to open up financial markets to new savers.
Millennials – those born between 1981 and 1996 – haven’t always had an easy time of it. Having left university with higher levels of student debt than most of their predecessors, many started their careers around the 2008 global financial crisis, a year in which stock markets plunged, recession ensued and unemployment levels started to rise. Given such negative influences you could be forgiven for thinking they have a rather cautious outlook on life.
That said, more accessible means of investing, principally through the use of smartphones, coupled with a focus on issues such as climate change and gender inclusivity may be helping this digitally minded generation to become more proactive in the way they look at their life savings and encourage others to do the same.
The popularity of financial trading apps available to smartphone users has, to some extent, done away with the mystery surrounding investing. By making it easier for millennials, and others, to see how their investments are performing at the touch of a button – anytime, anywhere – apps have made investing way more accessible to the masses. The easy-to-use and digestible financial information readily available on social media has also broken down barriers to investing.
Via their apps, users can gain access to trading platforms where they can buy or sell investments. Whereas even a few years ago, a fee would have been charged for such trading, many trading platforms don’t charge a platform fee (although other costs may be incurred).
Aside from millennials helping to create greater accessibility to investors in general, they have also taken steps to promote the green agenda around responsible investing. Over the past few years, there has been a definite increase in awareness of climate-related risks, social injustices and gender disparity – factors falling broadly under the label of environmental, social and governance (ESG) issues.
Movements such as Extinction Rebellion and the efforts of Swedish environmental activist, Greta Thunberg, have increased awareness of climate and social issues. While interest in ESG topics has grown across the board, research we carried out suggests it is the millennials who are most engaged with these issues.
We believe, millennials have helped open up investing to others through the use of social media and have taken steps towards advancing the ESG agenda. It would appear that they have transformed themselves from the young and risk-averse, to the young, empowered and influential. As we believe millennials’ involvement in financial markets will significantly increase over the next decades, it would seem we need to understand their thinking to determine how they could shape investments in the years to come.
Remember, the value of any investment is not guaranteed. The value of investments and any income received from can go down as well as up and you may not get back as much as you had originally invested.