Why Younger Generations May Abandon Traditional Investment Firms

Traditional wealth management companies may need to reconsider their strategy or risk losing younger clients as new regulations are set to reveal high banking fees.
According to a recent investment satisfaction survey by J.D. Power, 25% of Gen Z and 22% of Millennials would consider switching wealth management firms in the next year, citing high transaction costs as their main concern.
The upcoming fee transparency regulations, known as total cost reporting, are scheduled to take effect in 2026 and would require more clarity and communication in explaining the costs and fees associated with investments.
This sentiment is echoed in findings from a Broadridge/Roubini ThoughtLab survey, which illustrates that Millennials possess a deep understanding of financial concepts critical to investment success. They are acutely aware of how fees can eat into returns, prefer index funds for their cost-effectiveness, and understand the use of derivatives for risk mitigation.
These evolving preferences indicate a seismic shift in how younger generations approach investing, prioritizing transparency, low fees, and the ethical dimensions of their investment choices.
This shift provides fertile ground for innovative financial technology companies like , which is stepping in to meet these new consumer demands with modern, user-friendly solutions.
boasts over 2 million members and processes $9.9 billion in payments annually. Mogo also holds around 13% equity in WonderFi, which operates Canada’s only fully regulated crypto exchange.
The Mogotrade platform allows users to trade stocks without commission, following a long-term investing strategy inspired by Warren Buffett, while its recently Moka.ai, a revamped version of its wealth-building application, which leverages behavioral science principles and provides tools for setting and managing financial objectives to guide users towards financial success. Moka.ai charges a $7 monthly fee, regardless of investment size, contrasting traditional high-fee mutual funds.
recently announced its Q4 and FY 2023 financial results, marking significant strides in operational efficiency and profitability. Under the leadership of founder and CEO David Feller, the company focused on enhancing its digital wealth platform, culminating in the successful relaunch of Moka and Mogo.
These efforts contributed to a slight increase in Q4 revenue to $17.2 million and a gross profit of $11.5 million. Operational efficiencies reduced total operating expenses by 25% to $11.7 million for the quarter, boosting revenue per employee by 83% since Q1 2022.
The year also ended on a high note with net income of $8.5 million, a dramatic improvement over the previous year’s net loss of $74.9 million. Mogo‘s commitment to innovation is further underscored by its new strategy to include Bitcoin and Bitcoin ETFs in its treasury management, reflecting its adaptability and forward-thinking approach in the financial sector.
Mogo’s investment portfolio includes several crypto-related ventures that represent about 35% of the company’s total market cap value. This includes investments into Canada’s leading digital currency exchange WonderFi, American digital currency exchange Gemini Trust, and Canada’s first licensed digital asset custodian, Tetra Trust. This exposure positions Mogo to benefit from the growing digital currency sector, which is expected to reach $11.71 billion by 2030.
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