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The millennial generation could be worth as much as $24 trillion in three years' time, according to UBS. For reference: That's roughly 1.5 times the size of the U.S. economy in 2015.
The wealth of this demographic group, now roughly ranging in age from 21 to 35, is driven by inheritance, entrepreneurial activities and income gains, the bank said in its report Thursday.
"Looking ahead, this generation looks set to benefit from one of the largest intergenerational wealth transfers ever, carried out over a comparatively short timeframe," write UBS' Mark Haefele, Simon Smiles, and Matthew Carter. Quoting a 2015 Accenture report, "Baby Boomers are expected to pass down around USD 30 trillion between 2011 and 2050 in North America alone."
But companies are going to have to do their research in order to win business from this generation. "It is critical that institutions adapt to the needs of these new guardians of capital," Simon Smiles, UBS' chief investment officer for its ultra-rich client group, said during an interview on CNBC's "Street Signs. "
"A first step in making changes would be to understand millennial tastes and behaviors, comparing those to other age groups in order to establish any observable differences," he said.
For their part, UBS suggests three differences in millennial traits compared with older generations: a desire for convenience, multi-channel delivery, and transparency.
According to the Harvard Business Review, millennials accounted for nearly half of all on-demand consumers in the U.S. in 2015, compared to 22 percent aged 55 or older. In turn, Deloitte Digital announced that 47 percent of millennial consumers used social media as part of their shopping experience.
Smiles added that millennials are more concerned than their parents are with the sustainability and impact of their consumer choices and investing. He said 87 percent of millennials "are likely to check the sustainability criteria of the products they buy. They're two times more likely than the average person to divest from a company that does not meet sustainability practices."
They are also risk-takers in business. A 2016 study from BNP Paribas and Scorpio Partnership finds that millennials not only launch businesses twice as often as their baby boomer parents but also eight years earlier in their careers.
"Businesses should therefore supplement traditional operating models with new, technologically-enabled ones," UBS said.