Millennials - typically known as people born between 1980 and 2000 - are becoming increasingly savvy about how and in what they would like to invest, while also becoming the largest demographic at 29% of the population.
By 2030 it's expected Millennials will represent the largest source of income and consumer spending, earning two out of every three dollars in Australia.
Not only will they become the biggest earning group, Millennials are also set to inherit significant wealth, further increasing their importance to the investment industry.
A report from Deloitte - Millennials and wealth management – found that this age group prefers self-directed investments through state-of-the-art technological platforms that allow them to access investments quickly and easily throughout the investment cycle.
Online broker CommSec adds that Australian Millennials now account for 25% of exchange traded funds (ETF) trades.
CommSec reports that 50% of all its new customers are under 35, with Millennial customers up by 51% in the past five years and representing 28% of all active members.
How do Millennials invest?
Deloitte's report also found that 87% of Millennials believe that business success should be measured by more than just financial performance.
Environmental, social and governance (ESG) are three central factors used to measure the sustainability and ethical impact of an investment in a company or business.
This has become a big driver in how Millennials invest with a doubling in funds invested in 'core responsible investment' strategies from 2013 to 2015 to $51.5bn and reaching 3.8% of total assets.
More impact to come
The trend is likely to accelerate further as Millennials make up a larger proportion of the market.
Many feel how they invest is a way to express their values, which could see financial investments to become more aligned with social, political and environmental factors.
According to a survey from U.S. Trust, 93% of Millennial investors considered a company's impact in these areas to be important when making an investment decision.
What this tells us is that Millennials are ahead of the curve when it comes to thinking about the impact and implications of responsible investment strategies.
Further, they are more likely to favour responsible investment strategies and are also 1.5 times more likely to believe that investing responsibly does not negatively impact performance.
All this means the financial services industry will need to continue to adapt as responsible investing becomes increasingly mainstream and less of a "niche" or "nice-to-have" addition to traditional shares offerings, and other asset classes including property, fixed income and cash.