The private banking has experienced remarkable growth in recent years, with the sector managing over 70% of the household market with financial portfolios of over €500,000. However, this trend is expected to change as the industry focuses on the next generation of investors. L’Italian club Private Banking (AIPB) worked with Accenture conduct a study of the evolving expectations and needs of the next generation of clients and financial advisors. Research shows that private banking needs to adopt new models to meet the needs of the new generation.
How private banking can attract young people
I study “Financial Advice for the Next Generation: New Models for Tomorrow’s Investors and Professionals”, analyzes and understands the evolving expectations and needs of the next generation of investors and financial advisors. The new generation of high potential individuals aged between 26-41 (Millennials) and 42-57 (Gen X) are interested in efficient and innovative financial advisory services, with a Financial assets estimated at around 600-700 billion euros. Andrea RaganiPresident of the AIPB, states:
“Over the past 15 years we have achieved tremendous results primarily working with silent generation and baby boomer clients. Now is the time to open up to the new generations accompany the generation change of our two private bankersthan from customers”.
To attract young talent, the industry must deliver including working methodsbased on an increase generation dialogue. Thanks to the contribution of these young professionals, the industry will be able to shape digital, innovative and efficient consulting services needed by Millennials and Generation X.
Italy scores well on financial literacy
Second Maximilian ColangeloFinancial Services Manager at Accenture, Recent research shows that Italy ranks first in terms of financial literacy, although the majority of Italians have expressed an interest in improving their financial knowledge. Additionally, the distribution of wealth in Italy remains fragmented and polarized, and there is an urgent need for financial literacy in the country.
Colangelo also noted that the technology could be a key factor in addressing these challenges and enabling new service models. Recommend innovative service models, designed for the new generations that could coexist harmoniously with traditional models and could offer the country various benefits in terms of sustainable growth, greater inclusion and financial literacy, and the improvement of the social system. Finally, the private banking sector would undoubtedly benefit from the adoption of the new models, which estimates suggest could lead to this 600-700 billion euros assets, 15 million customers and 9 billion euros possible additional income.
New generation investment trends in Italy
The research aimed to understand the investment behavior and preferences of the new generation of middle-aged investors in Italy 26 and 55 years old. The study surveyed customers of traditional and online banks in Italy to obtain information about the investment portfolio, financial resources and investment preferences of this target group.
Research has shown that a significant percentage of investors in this age bracket have an investment portfolio of less than €50,000. However, more than 40% of respondents said they were financially available between 500,000 and 1 million euros. This suggests that while there are a significant number of investors with modest investment portfolios, there are also a significant number of investors with higher net worth.
In addition, the study showed that these investors have different investment preferences. For example, While some investors prefer to invest in traditional financial instruments such as stocks and bonds, others are interested alternative investment opportunitiesas cryptocurrencies and real estate.
In addition, the study found that younger investors are more interested in sustainable investing, with more than half of respondents a preference for socially responsible investments. This suggests that the next generation of investors in Italy are not only interested in making profits, but also in investing in companies that have a positive impact on society and the environment.
Overall, the study provides valuable insights into the investment behavior and preferences of the new generation of investors in Italy and underscores the need for financial institutions to adapt their investment products and services to the changing needs and preferences of this target group.