Archer Insights

Personalization is the Key to Winning Emerging Investor Loyalty

This article originally appeared in the May 2 edition of

With millennials expected to inherit $32 trillion over the next several years, they will become the richest generation the U.S. has ever seen.

This wealth transfer represents a massive opportunity for investment managers who are prepared to attract these investors, and to earn their long-term trust and loyalty.

Performance has traditionally been the key to attracting and retaining investors. But forward-thinking managers are realizing that returns alone will be inadequate in securing emerging investor loyalty over the long haul. This generation has their own set of preferences, beliefs and habits that will likely require a shift in the investment management value proposition.

Research shows that emerging investors’ preferences revolve around one crucial theme: personalization. Whether it be their investment products, the way they communicate or how they receive their financial information, emerging investors value personalization.

Natives of the digital service economy, younger investors have come to expect more. More communication. More personalization. More customization. For example, their preference to match their work and financial lives to their value sets is a clear trend we’re addressing as employers and as financial professionals. They are driving new opportunities for us, and here are a few ways to be sure we leverage those opportunities:

Personalized portfolios with socially responsible/ESG options

Emerging investors are seeking investment strategies and holdings aligned with their life ideals, redefining value investing as we’ve known it and stretching asset managers’ capacity for portfolio strategy creation. An analysis from EY found that emerging investors are almost twice as likely to invest in funds that incorporate ESG considerations. Nearly a third of investors in their 20s and 30s surveyed are looking for a financial professional that provides values-based investing.

To meet this demand in a cost-efficient manner, investment managers can rethink their approach to portfolio construction with new capabilities. Today, technology-assisted ESG overlays on pre-existing models creates newly marketable strategies. These overlays can be customized at the investor level, applied via overweights or underweights to individual securities and efficiently generate and operate a strategy-for-one. Asset managers able to adjust portfolios to individual investor sentiment have a distinct advantage when working with a younger investor group.

Multiple digital touchpoints for customizable interactions and data access

This is the first generation to grow up managing their lives online. They rely on their smartphones and laptops for everything from scheduling appointments and making purchases to communicating with friends and family.

Similarly, they seek a digital component to their financial experience. According to a survey from Accenture, 66 percent of millennial investors want a digital investment portal, 63 percent want a mobile platform, and 62 percent desire a platform that incorporates social media. Earning the loyalty of this next generation of investors requires asset managers to meet millennials on their terms, wherever and whenever that may be. Only with complete communication flexibility and customizable access to data will true loyalty be able to grow.

Straightforward and client-personalized performance reporting

For decades, investor performance reporting – at least for retail financial services – was delivered according to a regular schedule and with predetermined content and format. These reports were typically printed, static, delivered monthly or quarterly, controlled by the manager, and designed to meet the mass needs of all investors. But emerging investors have a completely new set of expectations when it comes to consuming information.

Much like their social media feeds, emerging investors now expect a more dynamic and flexible view of their holdings, transactions, and performance. They have an appetite for financial information that is customized to their desired settings. They prefer information delivered at a custom cadence or on demand, and with the tap of a finger. To deliver this, investment managers need access to robust data and the tools to render the data in multiple formats. With this combination of data and tools, managers can interact with their younger clients in new and more personalized ways.

Broadening Horizons

Earning the loyalty of a generation with a completely different set of preferences and expectations requires that all of us adopt capabilities that were unthinkable a decade ago. But achieving the level of personalization and customization demanded by millennials is possible. It simply requires a new mindset, a flexible approach, and a technology infrastructure that’s up to the challenge.

  1. $32 Trillion: 
  2. Personalization:
  3. Digital service economy:
  4. Twice as likely:
  5. Accenture:
Bill Wright
Bill Wright
Executive Vice President, Service Delivery

Bill Wright joined Archer in 2016 and has over 24 years of experience in the investment management industry, including operations, trading, and relationship management. His background allows him to understand our clients’ needs across the solutions offered by Archer while ensuring we serve our clients with effectiveness, efficiency, and foresight.  Bill supports our clients through consistent, dedicated service execution that provides a foundation for efficient growth and an ability to explore new product development.

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