29 October 2018
The investment market is being forced to react to the growing influence of a generation which is not prepared to save as much its predecessors, according to a Birmingham wealth management expert.
Steve Johnson (pictured), managing partner of Ward End based investment specialist S Johnson Wealth Management LLP, said that millennials – those born between 1981 and 1996 – were poised to become the world’s main consumers of products and services.
But, unlike previous generations, the millennials were unlikely to be savers, instead preferring to spend their cash on whatever they wanted straight away. But although that might dent the savings market, it could boost consumerism, as the millennials were likely to have more disposable income than their predecessors.
Mr Johnson said: “The idea of saving to be able to afford something is much less practised than once it was.
“Millennials want to live in cities and put off expensive decisions, such as marriage and raising a family.
“They also have a ‘want it now’ expectations, which can be illustrated by those who feel that having to wait a full 24 hours for Amazon to deliver is unreasonable.
“On the other hand, people in this country are generally not left to starve on the street and often can look forward to inheriting or being supported by the Bank of Mom and Dad (Bomad).
“Also, in terms of inheritance, which is not something many older people take for granted, the millennials are likely to inherit more.”
Mr Johnson added that ‘FAANGS’ (Facebook, Amazon etc) were examples of the recent evolution of the generations, and that millennials were typically more focused in time, spending more now and saving less for the future.
He said that this would certainly affect the investment market and how it operated, but part of how this market worked was all about identifying future trends.
“We need to understand millennials when investing, since they will drive world economies,” he said.
One other trend which might affect spending, both for individuals and governments, was the continuing increase in human longevity, which meant increasing levels of medical and elderly care would be needed across the world.
Mr Johnson added: “Advances in medical science mean Millennials might well live forever – although their maintenance bills will be a lot higher.”