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UBS Wealth Management launches white paper on millennial wealth

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  • Global digital connectivity is reshaping how the world approaches wealth, especially in the case of millennials and their advisers.
  • Like e-retailers and social media, wealth managers will have to operate like online platform companies if they wish to provide financial advisers with a broad toolkit to help millennials and other clients.
  • These platforms must go beyond the prevailing 'financial supermarket' model and offer millennials and other clients personalized opportunities globally, including networks of relevant contacts.
  • Digital media has also raised awareness of global social problems, with millennials leading demand for sustainable and impact investing.

Zurich, 22 June 2017 – UBS Wealth Management's Chief Investment Office today launched a white paper on millennial wealth. The paper concludes automation and connectivity will further shape millennials' wealth management tastes and how advisers service clients.

As technology diffuses, millennials and their advisers look set to lead a wider movement beyond 'financial supermarkets' and towards broader, more personalized online wealth platforms. This socially connected era will favor online networks that can help advisers source global opportunities for clients, including generating social as well as financial returns on their capital.

According to a global UBS survey in October 2016, 43% of millennials see their technology skills as a positive future influence on their financial security, ranking fourth out of 16 factors. By contrast, only 36% said the same about their country's job market. Overall knowledge ranked first, with 61% seeing their level of education as a plus, indicating the high value of digital information to advisers and their millennial clients.

Mark Haefele, Global Chief Investment Officer (CIO) at UBS Wealth Management, said: "In a more socially connected age, wealthy millennials and other private clients have expressed growing interest in innovations like digital platforms and sustainable and impact investing. This gives wealth managers and financial advisers a renewed opportunity to improve their digital capabilities as well as using private capital to help make the world a more sustainable place."

Simon Smiles, CIO for Ultra High Net Worth at UBS Wealth Management and a WEF Young Global Leader, said: "Our wealthiest millennial clients are at the forefront of the trend towards digital networking and mobilizing investments for public good. To meet related needs, wealth managers and financial advisers must prioritize new digital services like financial networks and help mainstream impact investing and other sustainability-related initiatives."

Millennial opportunities

  •  Millennials are likely to be worth up to $24trn by 2020, or roughly 1.5 times US GDP1 . They start twice as many businesses as baby-boomers and found their first eight years sooner2 . In North America alone, baby-boomers will pass down c. $30trn to millennials and other heirs in 2011-503 .
  • Millennials lead other generations in demanding digital communication and services. 49% of on-demand consumers are millennials vs. 22% who are 55+4 ; 47% of millennials use social media as part of shopping vs. 19% of non-millennials1.
  • Finally, global connectivity has brought greater awareness of global problems, boosting millennials' interest in sustainability issues. Under-35s are roughly twice as likely to withdraw from investments that are experiencing sustainability concerns5 .

Cross-generational solutions

  • E-commerce provides a model for personalized digital wealth platforms beyond financial 'supermarkets.' By offering personalized information and opportunities, and social contacts who share clients' passions and business interests, multinational platforms can appeal to millennials' current demands and other clients' evolving digital tastes.
  • Sustainable investing and impact investing, which aims to generate a measurable social or environmental impact as well as a compelling return, are examples of fast-growing areas that cater to millennial demand for purposeful investments. As other generations increasingly follow millennials' example, the sector could benefit from more information and dialogue regarding domestic and international opportunities.

UBS Wealth Management's recent commitments

  • UBS will continue to offer digital platforms such as UBS SmartWealth and networks like the UBS Industry Leader Network and Global Visionaries to help meet clients' digital and networking needs.
  • After raising a record $471m for its Oncology Impact Fund in 2016, UBS will direct at least $5bn of client assets into impact investments over the next five years relating to the UN Sustainable Development Goals. UBS Asset Management has also launched products based on the Chief Investment Office's Long-Term Investment themes, many of which have a sustainability angle.
  • UBS will also help launch Align17, a philanthropy and investment platform and online network focused on SDG funding gaps. Align17 is named after the 17th SDG of partnership towards the Goals. 

To view the full white paper and associated regional data, visit www.ubs.com/cio.

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About UBS

UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. The operational structure of the Group is comprised of our Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. UBS's strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates, in order to generate attractive and sustainable returns for its shareholders. All of its businesses are capital-efficient and benefit from a strong competitive position in their targeted markets.

UBS is present in all major financial centers worldwide. It has offices in 54 countries, with about 34% of its employees working in the Americas, 35% in Switzerland, 18% in the rest of Europe, the Middle East and Africa and 13% in Asia Pacific. UBS Group AG employs approximately 60,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

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