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The Millennial Opportunity India | June 2015

The Affluent Millenial Opportunity Study - India

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The

Millennial Opportunity

India | June 2015

There are 395 million millennials in India. This segment is vital to the Indian economy as they are a key economic driver for the future. This shift to a more technologically mobile, self-empowered generation will drastically change the primary buyer persona of financial services firms around the world, thus forcing massive changes to their marketing strategies and business models. How can financial services providers prepare for these drastic changes? LinkedIn and Ipsos recently conducted a global study of approximately 800 Millennials in India to help answer this question. The study worked to identify their preferences and behaviors regarding savings and investments, as well as their attitudes and beliefs about financial services providers. It examined how Affluent Millennials are reshaping the future of the finance industry, how they are preparing for their future today and how financial institutions should reach, nurture and deepen relationships with affluent millennials.   

Background

GLOBAL SURVEY

20 minute online survey, fielded by LinkedIn and Ipsos in April 2015.

Survey measured usage, engagement, attitudes and opinions on financial services.

GLOBAL SAMPLE

9,200 respondents in 10 countries: United States, Canada, United Kingdom, France, Netherlands, Australia, India, Singapore, Hong Kong and Brazil.

Quota sampling/weighting applied to represent Internet users in each market.

CRITERIA

Respondents were Millennial (18-34) and Gen X (35-49) Internet users.

In India, Affluent is defined as more than 30 Lakhs but less than 2 Crore net investible assets, excluding real estate.

INDIA RESULTS

This report covers results from 802 total respondents in India, including:

502 total Millennials (incl. 138 Affluent) and 300 total Gen X (incl. 108 Affluents).

Methodology

Understand the differences between Millennials and Gen X

with regard to brand affinity, purchase process and information-gathering.

Examine the subset of Affluent Millennials to understand their unique mindset, behaviors and

expectations.

Comprehend the role that social media plays and the influence

that content and context has on the decision journey for retail

financial products.

RESEARCH OBJECTIVES

AFFLUENT MILLENNIALS ARE…

Key Findings Summary

ETERNAL OPTIMISTS

Unparalleled in confidence about their financial future, happy to sacrifice now for the future and set ambitious life goals.

Demonstrate stronger trust and loyalty with their current financial services relationships.

SOCIAL-CENTRIC

Financial institution’s social networks are a must-have and central to Affluent Millennial financial decisions.

HUNGRY FOR EDUCATIONAL INFO

Top content includes peer reviews, expert opinions or commentary, thought leadership, educational content and information about product services.

OPEN MINDED

Despite being loyal customers, Affluent Millennials are open to financial offerings from traditionally non-financial brands and are early adopters of emerging payment technologies.

INDEPENDENT

Are happy to take on debt to fund their lifestyle goals

Do financial research on their own, however see intrinsic value in being able to validate this with a financial advisor.

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AMBITIOUS, PROGRESSIVE & CONFIDENT:

How This New Power Persona Is Reshaping The Finance Industry

% Agree: One financial ideal is that every citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. Is this ideal alive and

possible today?

Affluent Millennials are utterly optimistic in their belief in the Indian dream

MILLENNIALS GEN XERS

To t a l : 8 5 % To t a l : 8 7 %

A ffl u e n t : 9 6 % A ffl u e n t : 9 3 %

More than half of Affluent Millennials anticipate another financial crisis. This does not stop them having confidence in India’s future economic growth, or the opportunity to invest in

their future success, in line with other groups.

Despite the belief in the Indian Dream, there is a concern about a potential future financial crisis

Millennials Gen XersAffluent Millennials Affluent Gen Xers

37%

54%

30%

39%

I anticipate another financial crisis to occur

I am confident in my country's future economic growth

The sacrifices I make now will pay off in the future

52%

60% 60%

69%

58%

64%59%

67%

% Agree: I expect to be successful and advance quickly in my career

“Millennials are different. They have grown up empowered and expect to have a more self-directed life.”

- Mohamed El-Erian,Chief Economic Adviser of Allianz

Affluent Millennials expect to own their own destiny

MILLENNIALS

Total: 63%

Affluent: 68%

Affluent Millennials are prepared to head overseas for the right opportunities

41%

58%

32%

45%

AFF

LUE

NT

MIL

LEN

NIA

LS

AFF

LUE

NT

GE

N X

MIL

LEN

NIA

LS

GE

N X

39%

54%

22%

36%

AFF

LUE

NT

MIL

LEN

NIA

LS

AFF

LUE

NT

GE

N X

MIL

LEN

NIA

LS

GE

N X

LEARNERSTravel overseas for further education/ study

WORKERSTravel overseas for work opportunities

Affluent Millennials define success through independence and freedom

Affluent Millennials Affluent Gen Xers

1.5x15%

10%

2x15%

8%

3x15%

6%

BEING ABLE TO TRAVEL & SEE THE WORLD

DOING FINANCIALLY BETTER THAN PARENTS

FREEDOM TO DO WHAT YOU WANT

INDEPENDENT, YET SEEKING GUIDANCE: For Affluent Millennials, Their Financial Future Starts Now

Affluent Millennials are more likely than Affluent Gen X to have a personal or business loan to facilitate their entrepreneurial and life goals.

Affluent Millennials are more likely to carry debt

HAVE AT LEAST ONE…

43%

28%

14%18%

68%

52%

27%

22%

45%

27%

11%8%

69%

35%

18%

9%

Credit card with a balance Personal loan Business loan Student loan

Wages are losing dominance as the primary source of wealth. Among those who have acquired any assets from wages, Affluent Gen X are more likely to say this is their primary

source of wealth.

Sources of affluence are shifting across generations

Compared to Affluent Gen X, Affluent Millennials are more likely to have gained their assets from:

SELF EMPLOYMENT

1.6x

SCHOLARSHIPS & GRANTS

1.4x

ROYALTIES

1.8x

Millennials

Gen Xers

Affluent Millennials

Affluent Gen Xers

54%

51%69% of

57% of

% Primary source of wealthAffluent Millennials Affluent Gen Xers

While brokerage accounts are standard, only 2 in 5 Affluent Millennials has a brokerage account, highlighting the importance for financial institutions to build relationships early as

Millennials grow their wealth.

Affluent Millennials are more likely than Affluent Gen X to have a brokerage account

% OF PAYCHECK SAVED PER MONTH

Affluent Millennials are more likely to save most of their monthly paycheck

1/3 of Affluent Millennials save most of their paycheck

25% + 50% +

70%

33%60% 21%

HAVE AT LEAST ONE ACCOUNT…

2 in 5 Affluent Millennials have a

brokerage account

31%

42%

BROKERAGE (NON-RETIREMENT)

3 in 5Affluent Millennials have

not yet started a retirement account

Affluent Millennials Affluent Gen Xers

Affluent Millennials Affluent Gen Xers

Affluent Millennials seek greater involvement and control in financial decisions, but still validate decisions with advisors

55% 54%

AFF

LUE

NT

MIL

LEN

NIA

LS

MIL

LEN

NIA

LS

SOLOISTPerform their own research, make decisions

and execute trades

42%

47%

AFF

LUE

NT

MIL

LEN

NIA

LS

MIL

LEN

NIA

LS

Despite their tendency to do their own research and seek information on financial decisions, 2 in 5 Affluent Millennials are particularly likely to see value in having a financial advisors for

their current assets, similar to those in Generation X.

Affluent Millennials like to validate their research with financial advisors, considering them a must-have

A FINANCIAL ADVISOR IS A…

39%

38%

51%

48%

10%

14%AFFLUENT

MILLENNIALS

AFFLUENTGEN XERS

Must-have Nice to have Unimportant

Nice to have Unimportant

VALIDATORConduct their own research and investmentdecision but consult with advisor to validate

Must-have

The affluent segment’s loyalty as customers isn't surprising when we see that they are more likely to trust the financial institutions they work with.

The Indian Millennial and Gen X populations are trusting of financial services brands, particularly affluent individuals

AMONG THOSE WITH MULTIPLE ACCOUNTS OF EACH TYPE, % WHO HOLD ALL WITH THE SAME INSTITUTION:

Once they are customers, Affluent Millennials are highly loyal to their financial institutions

Affluent Millennials are significantly more likely to say they are very loyal and plan to do more business with financial institutions they work with.

CHECKING

AFFLUENT MILLENNIALS: 76%

AFFLUENT GEN XERS: 31%

RETIREMENT

AFFLUENT MILLENNIALS: 52%

AFFLUENT GEN XERS: 36%

CREDIT CARD(no balance)

AFFLUENT MILLENNIALS: 46%

AFFLUENT GEN XERS: 11%

BROKERAGE

AFFLUENT MILLENNIALS: 59%

AFFLUENT GEN XERS: 27%

36%

51%

57%

46%

7%

3%

Somewhat loyalVery loyal Not loyal

AFFLUENT MILLENNIALS

AFFLUENT GEN XERS

80%

92%

84%90%

AFF

LUE

NT

MIL

LEN

NIA

LS

MIL

LEN

NIA

LS

AFF

LUE

NT

GE

N X

GE

N X

More than three quarters of Affluent Millennials with multiple checking accounts hold all of these at the same financial institution.

Two in three Affluent Millennials use a mobile payment service

And Affluent Millennials already have high adoption rates of NFC mobile payment platforms

Likelihood to try services from a non-financial brand

However, the Indian population is open to financial offerings from traditionally non-financial brands.

70% 71%

65%

73%

BRAND BIZ: Which of these companies do you currently use?

59%69%

43%

63%

32%

43%

16%

28%

15%20%

11% 9%

69%

Millennials

Gen Xers

Affluent Millennials

Affluent Gen Xers

Millennials Gen XersAffluent Millennials Affluent Gen Xers

HIGH EXPECTATIONS & BIG DEMANDS:

Affluent Millennials Want A Deeper ConnectionWith Financial Services Providers

FIVE KEY FACTORS OF IMPORTANCE TO AFFLUENT MILLENNIALS

When choosing financial institutions, privacy and positive online buzz are important to Affluent Millennials

PRIVACY

Offers a high degree of privacy and has a good

security track record

PURPOSE

Company has a community mission you care about

EXPERTISE

Company has financial advisors with a great deal

of experience

WEBSITE

Offers a website that has all the banking features I need

SOCIAL PRESENCE

Company has positive online buzz

AFFLUENT MILLENNIALS USE SOCIAL NETWORKS MORE THAN GEN X TO:

% of Affluent users that use at least 1 social network to obtain this type of info

Inform personal finance/investment

decisions

65%

Seek content from financial companies

64%

Affluent Millennials consider social networks a must-have and are central to their financial decisions

Peer opinions, thought leadership and product reviews top content for Affluent Millennials on social networks

AFFLUENTMILLENNIALS

MILLENNIALS

AFFLUENTGEN XERS

GEN XERS

Must-have Nice to have Unimportant

Nice to have UnimportantMust-have

60%

52%

32%

39%

8%

9%

56%

47%

39%

42%

6%

10%

EDUCATIONALCONTENT

PEEROPINIONS

THOUGHTLEADERSHIP

93%

82%

AFFLUENTMILLENNIALS

AFFLUENTGEN XERS

92%

76%

AFFLUENTMILLENNIALS

AFFLUENTGEN XERS

90%

67%

AFFLUENTMILLENNIALS

AFFLUENTGEN XERS

Source: LinkedIn behavioral data, GLOBAL, May 2015

COMPARED TO THE GENERAL POPULATION ON LINKEDIN, AFFLUENT MILLENNIALS ON

LINKEDIN HAVE:

Affluent Millennials are especially active on LinkedIn

GROUP ACTIVITY SHARES

FINANCE TOPIC SHARES

COMPANY FOLLOWS

2x AS MANY 13x AS MANY

CONNECTIONS

Implications and opportunities for FS marketers

Opportunities available to financial services providers to successfully navigate potentially tumultuous times and even thrive through it all.

Affluent Millennials are hungry for information that can be directly applied to their specific financial situation and they are looking for it within social networks.

Financial services providers should leverage the social networks to provide relevant content.

Earn trust and build relationships with Affluent Millennials by delivering the balance of expert advice and encouraged independence they crave.

Transform the customer relationship by providing vital resources that support customers daily activities.

PERSONALIZE AND SOCIALIZE EXPERT ADVICE TO ESTABLISH TRUST

AND ENABLE INDEPENDENCE

Affluent Millennials have proven to be extremely loyal once their trust is won.

Financial services providers should reach out to Affluent Millennials now and build relationships with them before the non-traditional competition is able to.

Earn their trust and secure their loyalty now and the outsider brands won’t have a chance.

ESTABLISH LOYALTY EARLY

3 in 5 Affluent Millennials do not have retirement accounts.

Establish relationships with Affluent Millennials now, becoming their trusted advisors to help cast a vision and execute a plan for retirement.

RETIREMENT PLANNING

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THANK YOUCONTACT: [email protected]