The millennial generation could be worth as much as $24 trillion in three years' time, according to UBS, not bad when it's roughly 1.5 times the size of the U.S. economy in 2015.
But the research shows a surprise: in the Middle East millennials are more hard-working and entrepreneurial compared to their global peers.
Ali Janoudi, Head of Wealth Management Central and Eastern Europe, Middle East and Africa, France and Belgium International at UBS, said, "Our research shows that millennials in the Middle East are hard-working, entrepreneurial, and place a premium on social networking. In our survey of UAE millennials last year, 52 per cent of respondents said they never expected to retire, compared with less than 23 per cent globally, while 91 per cent had already started their own business or considered themselves likely to in the near future. They also considered building social connections and social networks to be the most important form of wealth. UBS continues to see significant potential for wealth creation among Middle Eastern millennials and will further develop networking as a key aspect of our wealth management offering."
The comments on Middle East millennials came from a wider study the investment bank undertook on millennials and how the mindset of wealthy young people will change the way wealth managers conduct business with them as digital interaction is increasingly being favoured over real human interaction.
The subject is close to the heart of bankers given millennials are more digitally engaged than other generations. In North America alone baby boomers will pass down US$30 trillion to millennials and other heirs between 2011 and 2050. And by 2020 millennials are likely to be worth up to $24tn, or about 1.5 times US GDP.
"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," said Mark Haefele, global chief investment officer at UBS Wealth Management.
"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."
The interest in millennials by wealth managers comes at a time when competition in the industry is becoming intense and profitability waning as a result, making bankers who manage the wealth of others keen to boost digital capabilities. UBS found in its research that millennials are leading the way when it comes to demanding digital communications and services. The bank found that 49 per cent of on-demand consumers are millennials compared to 22 per cent who are 55 and above.
Meanwhile, 47 per cent of millennials use social media as part of shopping versus 19 per cent of non-millennials.
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