The Affluent Millenial Opportunity Study

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The Millennial Opportunity India | June 2015

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Background 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.   

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Methodology GLOBAL SURVEY GLOBAL SAMPLE 20 minute online survey, fielded by LinkedIn and Ipsos in April 2015. 9,200 respondents in 10 countries: United States, Canada, United Kingdom, France, Netherlands, Australia, India, Singapore, Hong Kong and Brazil. Survey measured usage, engagement, attitudes and opinions on financial services. Quota sampling/weighting applied to represent Internet users in each market. CRITERIA INDIA RESULTS Respondents were Millennial (18-34) and Gen X (35-49) Internet users. This report covers results from 802 total respondents in India, including: In India, Affluent is defined as more than 30 Lakhs but less than 2 Crore net investible assets, excluding real estate. 502 total Millennials (incl. 138 Affluent) and 300 total Gen X (incl. 108 Affluents).

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RESEARCH OBJECTIVES Understand the differences between Millennials and Gen X with regard to brand affinity, purchase process and information-gathering. Comprehend the role that social media plays and the influence that content and context has on the decision journey for retail financial products. Examine the subset of Affluent Millennials to understand their unique mindset, behaviors and expectations.

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Key Findings Summary AFFLUENT MILLENNIALS ARE… ETERNAL OPTIMISTS INDEPENDENT OPEN MINDED Unparalleled in confidence about their financial future, happy to sacrifice now for the future and set ambitious life goals. Are happy to take on debt to fund their lifestyle goals Despite being loyal customers, Affluent Millennials are open to financial offerings from traditionally non-financial brands and are early adopters of emerging payment technologies. 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. Do financial research on their own, however see intrinsic value in being able to validate this with a financial advisor. HUNGRY FOR EDUCATIONAL INFO Top content includes peer reviews, expert opinions or commentary, thought leadership, educational content and information about product services.

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AMBITIOUS, PROGRESSIVE & CONFIDENT: How This New Power Persona Is Reshaping The Finance Industry

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Affluent Millennials are utterly optimistic in their belief in the Indian dream % 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? MILLENNIALS GEN XERS To t a l : 8 5 % To t a l : 8 7 % Affluent: 96% Affluent: 93% Despite the belief in the Indian Dream, there is a concern about a potential future financial crisis 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. Affluent Millennials Millennials Affluent Gen Xers Gen Xers 69% 60% 54% 60% 67% 64% 58% 59% 52% 39% 37% 30% 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

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Affluent Millennials expect to own their own destiny % 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.” MILLENNIALS - Mohamed El-Erian, Chief Economic Adviser of Allianz Total: 63% Affluent: 68% Affluent Millennials are prepared to head overseas for the right opportunities 58% 54% 45% 41% 39% 36% WORKERS Travel overseas for work opportunities LEARNERS AFFLUENT GEN X 22% GEN X AFFLUENT MILLENNIALS MILLENNIALS AFFLUENT GEN X GEN X AFFLUENT MILLENNIALS MILLENNIALS 32% Travel overseas for further education/ study

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Affluent Millennials define success through independence and freedom Affluent Millennials Affluent Gen Xers 15% 1.5x 10% FREEDOM TO DO WHAT YOU WANT 15% 2x 8% BEING ABLE TO TRAVEL & SEE THE WORLD 15% 3x 6% DOING FINANCIALLY BETTER THAN PARENTS

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

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Sources of affluence are shifting across generations 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. Affluent Millennials Affluent Gen Xers % Primary source of wealth 54% 57% of 51% 69% of ROYALTIES SELF EMPLOYMENT SCHOLARSHIPS & GRANTS 1.8x Compared to Affluent Gen X, Affluent Millennials are more likely to have gained their assets from: 1.6x 1.4x Affluent Millennials are more likely to carry debt Affluent Millennials are more likely than Affluent Gen X to have a personal or business loan to facilitate their entrepreneurial and life goals. HAVE AT LEAST ONE… Millennials Gen Xers 69% 68% Affluent Millennials Affluent Gen Xers 52% 43% 45% 35% 28% 27% 27% 14% Credit card with a balance Personal loan 18% 11% Business loan 18% 22% 8% Student loan 9%

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Affluent Millennials are more likely to save most of their monthly paycheck % OF PAYCHECK SAVED PER MONTH Affluent Millennials Affluent Gen Xers 25% + 50% + 70% 60% 33% 21% 1/3 of Affluent Millennials save most of their paycheck Affluent Millennials are more likely than Affluent Gen X to have a brokerage account 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. HAVE AT LEAST ONE ACCOUNT… Affluent Millennials Affluent Gen Xers 42% 3 in 5 Affluent Millennials have not yet started a retirement account 31% BROKERAGE (NON-RETIREMENT) 2 in 5 Affluent Millennials have a brokerage account

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Affluent Millennials seek greater involvement and control in financial decisions, but still validate decisions with advisors 55% 54% 47% AFFLUENT MILLENNIALS MILLENNIALS AFFLUENT MILLENNIALS MILLENNIALS 42% VALIDATOR Conduct their own research and investment decision but consult with advisor to validate SOLOIST Perform their own research, make decisions and execute trades Affluent Millennials like to validate their research with financial advisors, considering them a must-have 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. A FINANCIAL ADVISOR IS A… Must-have AFFLUENT MILLENNIALS 38% Must-have AFFLUENT GEN XERS Nice to have 39% Unimportant 48% Nice to have 14% Unimportant 51% 10%

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Once they are customers, Affluent Millennials are highly loyal to their financial institutions AMONG THOSE WITH MULTIPLE ACCOUNTS OF EACH TYPE, % WHO HOLD ALL WITH THE SAME INSTITUTION: CHECKING BROKERAGE RETIREMENT CREDIT CARD AFFLUENT MILLENNIALS: 76% AFFLUENT MILLENNIALS: 59% AFFLUENT MILLENNIALS: 52% AFFLUENT MILLENNIALS: 46% AFFLUENT GEN XERS: 31% AFFLUENT GEN XERS: 27% AFFLUENT GEN XERS: 36% AFFLUENT GEN XERS: 11% (no balance) More than three quarters of Affluent Millennials with multiple checking accounts hold all of these at the same financial institution. Very loyal Affluent Millennials are significantly more likely to say they are very loyal and plan to do more business with financial institutions they work with. Somewhat loyal AFFLUENT MILLENNIALS Not loyal 51% AFFLUENT GEN XERS 46% 36% 57% 3% 7% The Indian Millennial and Gen X populations are trusting of financial services brands, particularly affluent individuals 92% AFFLUENT GEN X GEN X AFFLUENT MILLENNIALS MILLENNIALS 80% 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. 90% 84%

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However, the Indian population is open to financial offerings from traditionally non-financial brands. 70% 73% 71% 65% Likelihood to try services from a non-financial brand Millennials Affluent Millennials Gen Xers Affluent Gen Xers And Affluent Millennials already have high adoption rates of NFC mobile payment platforms Two in three Affluent Millennials use a mobile payment service Millennials 59% Affluent Millennials Gen Xers Affluent Gen Xers 63% 69% 43% 43% 32% 28% 16% 15% 20% 11% 9% BRAND BIZ: Which of these companies do you currently use?

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HIGH EXPECTATIONS & BIG DEMANDS: Affluent Millennials Want A Deeper Connection With Financial Services Providers

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When choosing financial institutions, privacy and positive online buzz are important to Affluent Millennials FIVE KEY FACTORS OF IMPORTANCE TO AFFLUENT MILLENNIALS PRIVACY SOCIAL PRESENCE WEBSITE Offers a high degree of privacy and has a good security track record Company has positive online buzz Offers a website that has all the banking features I need PURPOSE EXPERTISE Company has a community mission you care about Company has financial advisors with a great deal of experience

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Affluent Millennials consider social networks a must-have and are central to their financial decisions Must-have Nice to have Unimportant 52% MILLENNIALS AFFLUENT MILLENNIALS 39% 60% AFFLUENT MILLENNIALS USE SOCIAL NETWORKS MORE THAN GEN X TO: 9% 32% 8% Inform personal finance/investment decisions Must-have Nice to have 47% GEN XERS AFFLUENT GEN XERS Unimportant 42% 56% 65% 10% 39% Seek content from financial companies 6% 64% Peer opinions, thought leadership and product reviews top content for Affluent Millennials on social networks % of Affluent users that use at least 1 social network to obtain this type of info PEER OPINIONS THOUGHT LEADERSHIP 93% 92% 82% AFFLUENT MILLENNIALS AFFLUENT GEN XERS EDUCATIONAL CONTENT 90% 76% AFFLUENT MILLENNIALS AFFLUENT GEN XERS 67% AFFLUENT MILLENNIALS AFFLUENT GEN XERS

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Implications and opportunities for FS marketers Opportunities available to financial services providers to successfully navigate potentially tumultuous times and even thrive through it all. PERSONALIZE AND SOCIALIZE 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. ESTABLISH LOYALTY EARLY EXPERT ADVICE TO ESTABLISH TRUST AND ENABLE INDEPENDENCE 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. RETIREMENT PLANNING Affluent Millennials have proven to be extremely loyal once their trust is won. 3 in 5 Affluent Millennials do not have retirement accounts. Financial services providers should reach out to Affluent Millennials now and build relationships with them before the non-traditional competition is able to. Establish relationships with Affluent Millennials now, becoming their trusted advisors to help cast a vision and execute a plan for retirement. Earn their trust and secure their loyalty now and the outsider brands won’t have a chance.

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THANK YOU CONTACT: lmsindia@linkedin.com

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