Analysis and Trends- EY Global Wealth Research Report: European millennials’ appetite for riskier investments in the current volatile market ranks higher than older age groups – Brief

EY Global Wealth Research Report: European millennials’ appetite for riskier investments in the current volatile market ranks higher than older age groups

• European millennial investors’ appetite for risk amid market volatility 1.5x higher than baby boomers, and is accompanied by a greater appetite to switch providers or actively move money
• 40% of private investors in Europe claim managing wealth has become more complex over the last two years, with protecting wealth and managing inflation a top priority
• When consuming advice, almost half (47%) of European private wealth clients opt for virtual sessions (up from 14% in 2021), followed by 30% preferring face-to-face interaction (down from 33% in 2021), while 23% look to the internet (up from 18% in 2021)

The appetite of European ‘millennial’ investors (those born between 1981 and 1996) to make riskier investments amid market volatility is higher than the generations above them, according to the EY Global Wealth Research Report 2023, as younger investors more actively respond to and are influenced by external market events.

The report, which surveyed over 2,600 wealth management clients globally, including 600 across Europe, found that over a third of European millennials (38%) are allocating to riskier investments, compared to just a quarter (24%) of ‘baby boomers’ (born between 1946 and 1964). This is despite over half (57%) of the millennials surveyed saying their investing needs have become more complex (compared to 35% of baby boomers) and 35% acknowledging they do not meet with their wealth advisor to review their goals frequently enough, which makes them less prepared (a figure that falls to 20% among baby boomers).

Peter Latos, Partner, Consulting, Strategy and Transactions leader, EY Romania: “Although European millennial investors have a higher risk appetite than baby boomers, they less frequently seek advice from their wealth advisor despite their investment needs having become more complex in recent years. Time will tell what impact such behaviours have on the long-term wealth creation of millennial investors. The report also highlights the challenge for wealth management advisors to retain European millennial investors who are twice as likely to switch providers or move money than baby boomers.”

Appetite for advice grows

Amid prolonged economic uncertainty, demand for professional advice to interpret economic, market and political shocks is currently heightened for many investors. However, European demand lags the global average. The survey found that 38% of European millennials and 34% of boomers are actively seeking advice from their financial advisor in response to political instability or uncertainty, compared to 42% and 33% respectively at a global level.

The survey also found that more than half (51%) of European millennials regularly seek additional independent financial advice in response to portfolio volatility, compared to 58% within this age group globally.

In terms of the preferred channels to receive advice, 47% of all European investors look to speak to advisors virtually, 30% opt for face-to-face interaction, and 23% look to the internet or apps. This has changed since the previous EY Global Wealth Research Report in 2021, which found that 14% of European private wealth clients preferred virtual advice, 33% preferred face-to-face interaction, and 18% looked to the internet or apps.

Millennial investors are making the switch

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. Millennials in European markets were found to be more than twice as likely to switch, add a new provider, or move money (71%) than baby boomers (32%). This is similar globally, where 73% of millennial investors plan to switch, add a new provider, or move money from their current wealth management provider over the next three years, compared to 29% of baby boomers.

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.

About EY Romania

EY is one of the world’s leading professional services firms with 365,399 employees in more than 700 offices across 150 countries, and revenues of approx. $45,4 billion in the financial year that ended on 30 June 2022. Our network is the most integrated worldwide, and its resources help us provide our clients with services allowing them to take advantage of opportunities anywhere in the world.

With a presence in Romania ever since 1992, EY provides, through its more than 900 employees in Romania and the Republic of Moldova, integrated services in assurance, tax, strategy and transactions, and consulting to clients ranging from multinationals to local companies.

Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. In 2014, EY Romania joined the only global competition dedicated to entrepreneurship, EY Entrepreneur Of The Year. The winner of the national award represents Romania at the world final taking place every year in June, at Monte Carlo. The title of World Entrepreneur Of The Year is awarded in the world final. For more information, please visit: www.ey.com

About the survey

The EY organization worked with Savanta to conduct a broad survey of more than 2,600 wealth management clients in 27 geographies to understand what they value most in their wealth management relationships across service models, engagement choices and value-aligned advice.

The EY organization profiled clients not just by traditional segments, such as age, gender, wealth and country of residence, but also by risk appetite, life stages, profession, sexual orientation, race and ethnicity and psychographic profiles. The EY organization also asked respondents to rate their knowledge in managing their finances and divided them into low, average and high categories depending on their knowledge of common and complex financial products.

Geographic coverage: North America including the US and Canada; Latin America including Mexico, Argentina, Brazil and Chile; EMEA including France, Germany, Italy, Luxembourg, Netherlands, Switzerland, and UK; Nordics including Denmark, Finland, Norway and Sweden; Middle East including Saudi Arabia, Qatar and UAE; Asia-Pacific including Australia, China, Hong Kong SAR, India, Japan, Republic of Korea and Singapore.