16 December 2022 |

Millennials Are Driving The Future Of Investing


Everyone in consumer fintech is obsessed with Gen Z’s. Gen Z’s this, gen z’s that. Perhaps I’m salty that I’m not in my 20’s anymore (I definitely am.) But, to me, it seems like consumer fintech just focuses on younger and younger audiences without thinking about how to solve problems for older demographics. Who, frankly, have a lot more money too. 

Two reports I got recently may show that building for millennials and older people might be more lucrative, particularly in the wealth management and trading space. 

First, a report from Drivewealth, a wealth tech infrastructure company that powers trading features for a ton of fintech apps. In the first half of 2022, the data shows that globally, millennials significantly outpaced other demographics in new account creation—46% of new accounts were opened by millennials, 26% more than Gen X & Baby Boomers combined. Gen Z’s are still making up a big chunk though, accounting for 36% of new accounts. 

But average trading size is where millennials really separate themselves—they’re trading a lot more in terms of volume compared to other demographics. Millennials trade sized averaged $373, compared to Gen Z’s (an anemic $91.) Gen X’s accounted for $206 while Baby Boomers came in second place at $284 (baby boomers probably have a bit more time on their hands, cause they’re retiring? I’m not sure…interesting though.)

Across regions, millennials accounted for over 50% of total orders in LatAm and the US. The biggest outlier was APAC (Asia Pacific) where millennials were the overwhelming source of trading activity—a whopping 94%. 

You may be saying “oh but Ian, Drivewealth mainly caters to fintech companies—their data is probably skewed.” Great point! But a new report from Fidelity backs a lot of this up too. (I highly recommend reading both reports, but especially the Fidelity one, as it has some of the best demographic data I’ve seen on Gen Z’s, millennials, and their financial life.)

Fidelity calls Gen Z’s and millennials “CLIPPers.” No its not an insult comparing young people to the lackluster LA basketball team (go Lakers)—younger investors are more willing to Consolidate their assets, are Loyal, want to Improve their financial standing, value Professional advice, and are willing to Pay for it too. So, for wealth managers, a potentially ideal customer base that’s only inheriting more wealth and increasing their earning potential over time. 

The report also has some hints as to why Fidelity has been so gung-ho about crypto—because young investors care too. According to Fidelity, 34% of Gen YZ (what they call Gen Z’s and millennials) hold cryptocurrencies, coming in second place only next to ESG stocks. 

Young people are the future of investing and there’s a ton of activity and potential to be captured. Companies like Robinhood are only the tip of the iceberg—there are ways to make saving and investing more accessible, social, and dynamic as well. As these folks look towards new tools and services to satisfy their needs, its becoming clear a lot of the potential in the future in investing is being driven by millennials.