WHEN PRIVATE IS MILLENNIAL

We Wealth | June 2021

They were born between 1980 and 1990 in rich families or from an enterprising and successful parent. They share a patrimony of a few dozen million euros, which, in part, is already theirs.

In Italy, few of them are self-made, however there are some successful start uppers among them.

Curious, carefree, sport lovers and, why not, art lovers. They are fluent in two or three languages and they have travelled the world.

They have been using social networks since they were teenagers. They follow influencers, but they are the true trend setters.

They tend to see each other, money is not everything, but you need to be really special to be included in their group of friends if you don’t have any.

They call their parents boomers and they often mock them when they act as youngsters.

They are involved in several activities and they often study at the best Italian universities where they graduate with top marks because they are very often quite smart and knowledgeable.

They love to show and to perform, but from private Instagram accounts; they have a high level of awareness towards environmental issues and they are champions of the politically correct.

Most of them have never been to a bank branch. For them, a bank is an app on their smartphones.

The bank, regarded with deference and respect by their parents, has become an abstract entity.

They look at cash with contempt, they have an average of three credit cards, and they tend to buy online.

Their parents’ life expectancy is twenty years higher than their great-grandparents and this is not bad because, except for a few exceptions, they cannot complain of their quality of life.

In fact, most of them have been living alone since they were twenty, in modern beautiful houses, lofts or penthouses with a breathtaking view, they obviously have family houses at the sea, in the mountains or at the lake.

Some of them have started a family to great delight of their parents.

The FINER Finance Mirror monitor – which, since 2018, has been focusing on the Private (from € 1 million > 5 worth in financial assets) and HNWI (from € 5 million and over) segments with 1.400 interviews, among which 7% to people born between 1980 and 1990 – suggests two main points of interest.

69% of millennial Private/HNW clients claim to be ready to interact directly with a digital platform in the management of their investments as compared to 34% of the relevant universe.

Among the many alternatives, illiquid forms of investment, (contemporary) art represents 29% for millennials vs. 12% of the overall sample.

The true challenge is to identify this segment which, in twenty-year time, will own most of the 800 billion in financial assets and twice as much in illiquid assets. 

In order to face this challenge, some of the most astute banks are gradually employing private bankers born between 1980 and 1990 who act as cultural mediators between their peers and the bank.

Today, private bankers under 40 are less than 5%. Their role consists in informing on the contemporary use of codes, channels and means of communication.

On their part, banks dedicated to the private and HNWI segments could improve their resources and internal competences in fields which go beyond asset management.

Almost all banks have an art collection and a curator; meetings with experts of contemporary art and artists are very much appreciated by young millionaires (68%). Even invitations to sport events are appreciated (72% choose sailboat, polo and golf, while 57% prefer football and tennis).

This is a good match in which new generations of wealthy people can be involved; the team should include a good nursery and a trainer ready to reimagine the team in each match. Provided that they aim at playing in the Series A for the next ten years.

Nicola Ronchetti

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