How must the investment fund industry customer experience change to attract new investors?
Technology and the immediacy that digital connectivity affords has transformed daily life. While adoption has rapidly increased over the past decade, the global pandemic has only served to intensify its use. The investment fund industry was steadily adapting for the investors of the future but given the effects of the global pandemic, it is likely to see much more rapid deployment in meeting expected demand.
The millennial generation are increasingly becoming a focus for asset and wealth managers (“managers”) given that the oldest of the group have now reached their forties. Historically, this age group are accumulating more wealth and thinking more about their financial future.
My next few articles will explore why marketing the same value propositions, capabilities and customer experience afforded to Generation X and Baby Boomers might not resonate as well with a generation that has different lifestyle priorities, buying behaviours and customer experience expectations of a generation born into the digital age.
I will explore the underlying factors that should be considered to ensure that solutions developed will benefit the underlying client, and support long-term sustainability of the investment funds industry.
To develop a deeper understanding of any generation, insight on life experience, expectations and aspirations is required. I will review the validity of some common assumptions associated with millennial lifestyles and their expectations. For example, they are frequently tagged as passive investors, with limited disposable income, digital interaction dependency, and a focus on lifestyle priorities.
As a young(ish) Generation “X-er” some of my commentary will be highly subjective. I have witnessed older Generation X-ers and Baby Boomers broadcast their opinion on many platforms as to what millennials want and need. Subsequently, I have seen the confusion if not disbelief on the faces of the younger audience as to how these conclusions were made. I will try not to make the same mistakes and so intend to thought-provoke rather than draw any conclusion.
While there is a plethora of reports and articles available on what the funds industry and wider financial services industry needs to do, there is not so many on the rationale as to why it is needed which generally suggests too many assumptions are being made. Some of the sources I will use are admittedly a few years old. However, it is important to recognise that just as the aftermath of Covid-19 will change customer habits, it has (for the time being) reduced more up to date research that focusses on long term outlooks. Additionally, those available might be distorting trends. Online shopping as an example has increased significantly during the pandemic, but what will that look like in a few years time? It will probably continue to rise, but how much of a tail off will there be when people feel more comfortable in venturing out again?
In the next few parts, I will look at some of the common assumptions around a generation spanning almost twenty years. They don't invest, they don't trust financial services and they expect everything to be digital. Throughout industrialized western nations, evidence certainly suggests that millennials generally have different attitudes towards financial matters than their predecessors. However, as misconceptions can misguide, it is important to make decisions based on facts rather than assumption.
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