A changing of the guard

09 November 2016Jason Dunn

A recent article in Forbes magazine revealed that Millennials will receive the largest transfer of wealth in recorded history.

Millennials have started graduating and integrating into the corporate and investment world, and they are changing the identity of what it is to be an investor.

Rising from the ashes

This generation has seen the global market crash three times in the last thirty years, 1987, 2001 and 2008. This is an era where transparency is becoming not just a virtue, but a requirement for investors.

Chance Burnett said in a Forbes article that “traditional practice of investing is being democratised and made more accessible.” The focus for investors is shifting from publically listed companies to small start-ups as the line between public and private is thinning.

Instant gratification

Any young individual can transfer shares on their phone, and they instantly see themselves as investors. Millennials want to be involved in every aspect of the process, the result being that the old practice of giving a broker access to their money and trusting that it will be invested in the correct manner is quickly becoming obsolete.

Millennials want to see how their investments go up or down in real-time, and they want to be able to make instant calls on changes that need to be made.

The wider scope

The facts are this, 33% of Millennials own shares in one form or another, 54% plan on starting their own businesses one day, and 27% claim to be self-employed. Clients of this generation are also highly tech savvy, but they cannot afford to put their skills to use as they are quite frankly, broke.    

There is no denying that the current job market is highly volatile, hence why this generation will become the most capitol efficient of all time. Once they have broken into that market they will not just keep their heads down and do the job.

Millennials have been raised to speak up for what they believe in, and this translates to always believing that they should have input into what goes on in the company that they work for. They are highly opinionated and they want the world to know it.

Some Statistics

In a survey of several thousand individuals, CNBC Africa did a survey on possible investment patterns that this generation will follow.

Of those questioned, 45% believe that larger steps need to be taken in order to protect and restore the environment; they will invest in corporations that are ‘green’ or are aimed at rebuilding and restoring the planet.

A further 43% of Millennials think that in order for companies to make the jump forward, they have to give the newer generation the opportunity to contribute to the ultimate vision and strategy that is to be implemented going forward.

Nearly two thirds of individuals who were interviewed stated that there is too much secrecy surrounding the corporate world. They see big banks making big money with no explanation of how or why. Millennials first and foremost believe in a transparent corporate world.

The times they are a changing

Regardless of statistics and surveys, there is no denying that Millennials are changing the investment world. Small start-ups are being funded by big investment firms, and technology is changing at the speed of light. The identity of the corporate world is quickly changing, and it is happening from within. As bleak as some prospects might appear for this generation, there is no getting around the fact that they have undying optimism.

Millennials are changing the financial world one step at a time, not only do they conduct business differently, but they in turn wish to be treated differently. A new approach needs to be implemented going forward, the ‘traditional’ way of doing business is no longer the most effective approach to the financial world.

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The FSB is thinking of scrapping Level II Regulatory Exam (which would have tested product knowledge) in favour of an approach that forces insurers to train staff and monitor their actions. Do you agree with this approach?


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