European millennials have a higher appetite for riskier investments in the current volatile market than older age groups, according to an EY report.
The 'EY Global Wealth Research Report 2023' surveyed over 2,600 wealth management clients globally, including 600 across Europe, and found that over a third of European millennials (38%) are allocating to riskier investments, compared to just a quarter (24%) of baby boomers.
Despite this, the report found that 57% of millennials surveyed claim their investing needs have become more complex, and 35% acknowledge they do not meet with their wealth advisor to review their goals frequently enough, which makes them less prepared. This figure falls to 20% among baby boomers.
The report also reveals that European millennials are more willing to seek professional advice when faced with market volatility, with 51% regularly seeking additional independent financial advice in response to portfolio volatility, compared to 58% within this age group globally.
The preferred channels to receive advice have also changed, with 47% of all European investors looking to speak to advisors virtually, 30% opting for face-to-face interaction and 23% looking to the internet or apps.
The report also found that the appetite to switch or move money from one provider to another is highest within the younger investor age brackets, with European millennials more than twice as likely to switch, add a new provider or move money (71%) than baby boomers (32%).
Additionally, the report suggests that investment in newer asset classes – such as FinTech, digital and crypto – is on the rise, and European private wealth clients are looking to the FinTech and alternatives market.
The demand for professional advice for these asset classes is also higher than in traditional areas, and investor engagement with FinTechs is expected to rise 12% in the next three years.
The report highlights the need for wealth managers to communicate effectively with investors, help spotlight issues, evaluate risk models and provide sound advice to dissipate the unease of younger investors.
The most agile and digitally enabled wealth managers will most likely see commercial success in a competitive environment, it said.
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