innovation challenge final
TRANSCRIPT
Fidelity Internal Information
Attracting the Millennial with Investep
Caitlin Cassidy, Scott Bryant, Arman Rahman, Chris Santos and Ciara Morley
Summer 2015
Young Investor Confidence in Financial Knowledge
Opportunity
“While Boomers hold the bulk of the nation’s
wealth today, there is a significant wealth shift
looming -- a transfer of a projected $1 trillion from the Boomer generation
to Gen X andGen Y -- every year for
the next 40 years.”
— Michael Durbin, President, Fidelity Institutional Wealth Services;
2013 Fidelity Poll: Innovating for the Future
2 Fidelity Internal InformationLiersch, Michael. MILLENNIALS AND MONEY (n.d.): n. pag. Merrill Lynch Private Banking & Investment Group. Web.
19%
56%
19%
High
Moderate
Low
Self-Directed Tendencies
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Reward
IndependenceWith a RoboAdvisor
With Group Portfolio Creation ToolsTo make investing a life-long habitEducation
Our Proposed Product
RoboAdvisors: Independence
User Advantages•Minimal to no human intervention
•Much lower minimum initial investment
•Accessible at any time
Company Advantages•Low employee costs
•Low capital and administrative costs
•Much larger customer base, many first-time investors
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• Goal: Make investing more accessible through automation • RoboAdvisors: Provide automated portfolio management online
• Same algorithms used by the traditional advisory community• Suggest different diversified portfolios based on user questionnaire
Picture: http://www.nytimes.com/2014/04/12/your-money/start-ups-offer-financial-advice-to-people-who-arent-rich.html
Group Portfolio Creation: Education
• Invite-only collaboration with friends and coworkers
• Virtual portfolio: starts with no personal money invested
• Track performance
• Option to invest personal money in personal portfolio or a top 5 portfolio
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Customer Incentives: Reward
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• $10 from Fidelity added to accountFirst Investment
• $50 gift cardTotal Investment of $2,000
• $100 from Fidelity added to accountActive Account for 12 Months
• $10 from Fidelity added to account of each group member
Three Portfolios Created
• $100 to invest in that portfolio to each group memberTop 5 Portfolio
Individual Rewards
Group Portfolio Rewards
Concerns for Fidelity
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Will there be significant profit from the Gen Y demographic?
Is there enough interest in this smaller market?
Young clients are a long-term investment to gain Fidelity customers for life.
“Just 18% of financial advisors are targeting Generation Y clients.”
-- Leslie Kramer, Investopedia
Drayer, Leah. “Millennials Investing Future”. Issuer Direct. Issuer Direct Corporation, 30 Jan 2015. Web. 28 Jul 2015.Kramer, Leslie. “Financial Advisors Need to Seek Out This Group NOW.” Investopedia. Investopedia, LLC, 26 Aug 2014. Web. 28 Jul 2015.Siciliano, John. “Millennials and their impact on the investment management industry: Innovators in investing.” Asset Management Blog. PwC, 6 Nov 2014. Web. 28 Jul 2015.
“The younger generation are taking financial planning more seriously and
starting to save at an earlier age.”--John Siciliano, PwC Managing Director, Asset Management Advisory and Global Strategy Lead
Growing Wealth
Doubts about Social Security
Increasingly Technology-Driven Investment Landscape
Conclusion
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MillennialsHabit-Formation
Win-Win