Majority of millennials unhappy with their financial service providers

11 September 2019 Consultancy.asia

Three in five high-net-worth millennials are frustrated with their current financial services providers, finds a survey from marketing and growth consultancy Simon-Kucher & Partners. 

Still portrayed in media circles as a bunch of irresponsible, young brats, the upper bracket of millennials are in fact now pushing forty, a good way along on the road to retirement. As such, wealth management services are of growing concern, yet a recent survey from consultancy Simon-Kucher & Partners has revealed – perhaps more in line with another millennial trope: entitlement – that 60 percent are unsatisfied with their current wealth management providers.

According to the global study – which quizzed nearly 650 HNWI (high-net-worth individual) millennials across the US, UK, Asia and Australia – the 60 percent figure is roughly consistent with the sentiment in Singapore, but rockets to a dissatisfaction rate of 80 percent among those in Hong Kong, while the same number overall are currently using or considering fintechs to manage their money – with plans to allocate over half of their investable assets to fintech.

Millennial dissatisfaction with wealth management providers

Here, Simon-Kucher notes the incredible intergenerational wealth transition set to take place in the near future, with Baby Boomers to have transferred $30 trillion of their wealth by 2046 and millennials, who will already make up half of the global workforce by next year, due to be the primary drivers of new wealth creation. This, says the firm, coupled with the current widespread dissatisfaction, should be a wake-up call to private banks if they wish to attract and retain business.

Already – as has often been noted with millennials – loyalty is thin on the ground, with survey respondents indicating an existing relationship with more than three private banking providers on average (and nearly four and a half in China). And underwhelmed millenialls are willing to walk, with the study further showing that millennials will only give banks one chance to impress them, such that “private banks need to get ahold of this next generation before it’s too late.”

“Especially in today’s turbulent market environment, banks need to rethink their offerings to satisfy their future customers,” said Silvio Struebi, Simon-Kucher partner and head of the firm’s banking operations for the APAC region. Desi Soetanto, a consultant at Simon-Kucher who spearheaded the study, adds; “The future survival of private banks will depend on whether they’re able to master the art of winning millennials and keep them as customers.”

Key characteristics that millennials value in wealth management

As part of the study, Simon-Kucher sought to uncover the key financial services characteristics which millennials valued the most, with quality and brand coming out on top followed by convenience – all of which were privileged above concerns for price. All in all, the firm identified eight primary factors for attracting millennials, among them; 24/7 access, customised recommendations, fee transparency, and comprehensive and exclusive offerings.

According to Soetanto, private banks need to add these “wow” factors to the customer experience in order to successfully upsell and satisfy clients. “To win in the race of attracting and retaining customers, private banks need to revamp their customer experience, which includes changing the relationship managers’ sales approach and accelerating the path towards digitalisation to provide customers with tailor-made offerings,” conclude the authors.