By Prakarsh Gagdani
As I always say, I find millennials to be a smart breed of investors. In fact, a recent study has indicated that around 9 of every 10 of them are looking at sustainable investing options. Given the current circumstances where the overall economy is suffering, more and more millennials are looking for alternative sources of income and/or investments to ensure a degree of financial security. With stock markets being functional even during the global pandemic that stalled the entire world for a while, despite the turmoil it has still managed to grab the attention of the millennials. In fact, the lockdowns have witnessed the record growth of investors in the Indian stock market.
Further, with most people working remotely and with reduced mobility around, this techno-savvy generation is looking at the options where they do not have to physically go around. They are basically looking at three vital factors when going ahead with their investments, they are Convenience – Cost – Reach. And that is exactly where the discount brokers are coming into picture.
Today most people are at homes and the only safest way to invest is to go digital. So the investors prefer choosing a broker that offers a seamless digital platform and has simplified processes with no physical documentations and minimal to no human intervention required. This is a major advantage to discount brokers as most discount brokers have their entire processes 100% digitized.
Next major factor that this generation of investor is always looking at is the cost. Since this group has newly started generating income, their pays are not that great so the surplus amount available with the millennials given their income and lifestyle expenses is not as much thus making them very cost sensitive. Therefore they are always in search of more affordable options for investment as they rather prefer reinvesting or spending the money saved on reducing the cost of investment. That is again attracting them more to the discount brokers as most of these brokers today do not charge anywhere more than Rs 20.
Lastly, the reach is the major factor that is working to the advantage of the discount brokers. Their main presence and business being online, today when most people are sitting at home and searching for investment options from home on their devices, they tend to discover the online discount brokers. The great online presence and the reach that these brokers attract this generation. Further, with all the information available at the fingertip, the potential investors can easily go and study the reviews and compare the offerings and cost of services and decide which broker they would want to go for.
As per another study, sustainable investment is looked at as an emerging segment and most fund managers across the globe are increasing the resources allocated in this area to come up with more investment products. Also millennials, to my observation till date, as investors are driving up the demand more than ever; and with sustainable investing drawing their attention and the increasing number of offerings by discount brokers in the area, I see that this group of investors will continue to lead the way.
(Prakarsh Gagdani is the Chief Executive Officer of 5paisa.com. The views expressed are the author’s own)