Everybody wants to crack the code when it comes to the millennials. The world's youngest generation of adults wields a huge amount of consumer spending power and represents a major force in business. But who are they exactly and what do they want? These are questions I hear buzzing around the hallways and bars of fin-tech and wealth advisory conferences in the U.S. and Asia all the time. Born after 1980, they hit their late teens during the tech craze of the 90s, when tech wunderkinds were producing million dollar startups by the hundreds. And then they watched those riches evaporate when the market tanked spectacularly in the early 2000s.
Now the millennials are taking the lessons learned from that era and building their own startup culture.
In fact, millennials apparently love launching new businesses. Nearly 60 percent of them are totally over the traditional career paths--there weren't many jobs for them upon graduation anyway if you remember--and consider themselves entrepreneurs, according to Entrepreneur magazine, which cites a report from Rasmussen College. It's a figure that is making the rounds in the media, including a recent column about the influence of millennial entrepreneurs from Brit Hysen, editor in chief of MiLLENiAL magazine. Millennials want to work for themselves.
Now these young whizzes have a name. BNP Paribas Wealth Management is calling them "millennipreneurs." Last month, the bank put out an extensive report on global entrepreneurs, a chunk of which is focused on this mystery cohort. The report offers some juicy data about the so-called millennipreneurs. You might be surprised to learn that they are not just hiding out in Silicon Valley, creating tech companies, for example. They are running everything from construction companies to retail outlets to automotive shops.
Last week, I chatted with Steve Prostano, head of Family Wealth Advisors for Bank of the West Wealth Management--a regional financial services firm that is a subsidiary of BNP Paribas--about millenipreneurs and what their rise and their tastes mean for the financial services firms that cater to the wealthy.
April Rudin: "Millennipreneurs," that's pretty catchy. What made the BNP Paribas Wealth Management decide to study this particular group? What can others learn from this report?
Steve: Everyone has been struggling with this millennial generation to find out how exactly they want to be served. We know they value transparency, technology, convenience. But there's a lot we don't know. If you want to build a relationship with this group, you need to know what they value so that you can align with those values at an early stage. Given all of the unknowns, this kind of research helps financial services companies understand them better so they can serve them better.
Rudin: Were there any findings in the BNP Paribas Global Entrepreneur Report that you think would be especially useful for wealth management firms that want to cater to this group?
Steve: Well, I think that one fact that was interesting was that in the U.S., these millennial entrepreneurs are slightly older when they're starting their first businesses than in other parts of the world. I think it was close to 35. That's a change from the late '90s. During the technology boom, you had a lot of people pursuing their dreams in their dorm room. But today it's different.
These days, kids can study entrepreneurialism in college. It has become a normal part of college curriculums. So entrepreneurialism has become more professionalized. It's almost a more traditional business approach to entrepreneurship. They're waiting until they're ready to launch a real business. They're a bit more sophisticated. This means financial services firms can expect many of them to speak the language of entrepreneurship and to have a well-developed understanding of what kinds of services they need.
The report also revealed that almost half of millennials based in the US sought advice from professionals when starting up their own business. This is great news for financial services firms. It's a good starting point. They're pretty bullish, too. A full 88 percent of millennials expect an increase in profits over the coming 12 months. That means now may be a good time to approach them, talk to them about how to ensure they can make the most of those profits. They're feeling optimistic about their business prospects.
Understanding these subtleties is the priority if you're going to serve these clients over their lifetime and address not just the business side of their wealth--their commercial banking needs and business banking needs--but also their personal wealth. Throughout the life cycle these two things often become intertwined and there's an opportunity to take a look at it from a holistic perspective.
Rudin: BNP Paribas has a few interesting offerings for millennials. Can you tell me about them and why they appeal to this generation? What is the takeaway for others who want to connect with millennials?
Steve: Well, BNP Paribas Wealth Management has a premium mobile social network for millennials called the Next Gen Club. They get access to exclusive educational content, based on their interests, discussions with opinion leaders. It also provides them with access to financial or privileged lifestyle events. Then, there's the networking aspect. They connect with their peers from around the world. And we allow them to connect with experts. They're also allowed to promote their own success and things of that nature and share moments in their life, whether it's business-related or personal. It's a community that was developed through annual Next Gen retreats.
I think the takeaway here is that you want to not only provide discrete financial services to this group, but to also broaden their horizons and help them build community, because these are things that this particular group really cherishes, and it's something they probably can't get elsewhere--a social network of like-minded entrepreneurs.
The Next Gen program retreat itself is something BNP Paribas has been offering for years. It happened to be once a year in Paris and once a year in Hong Kong, but the invitations are to global families, so U.S. participants have also been invited. Millennial clients--and baby boomers as well--really love these, because they love to be part of the community and they love to collaborate. The principle here is the same. Community is important to everyone, but it's especially important to the millennials. If you can offer them ways to build community, they will keep coming back.
The millennials will be with us for many decades more, so now is the time to get to know them. Start those relationships early and you will grow with them over their lifetimes. It's a bold generation, which makes them exciting to work with. I see great potential for financial services firms to partner with these millennipreneurs and help them shape the future of business.