Reaching the younger generation
Being user-friendly, tech-friendly and cost-effective are non-negotiables for the next generation of investors, with many having been burnt by assets such as cryptocurrency in the past.
Speaking at the Stockbrokers and Investment Advisers Association (SIAA) conference in Sydney, Candice Bourke, senior investment adviser at Shaw & Partners, said there were certain topics which resonated with the next generation including thematic, ethical and social impact funds.
However, there were still non-negotiables on how firms could structure their proposition if they wanted to reach this market.
“They need to be user-friendly, tech-friendly and cost-effective, they want certainty and liquidity as they might be suffering PTSD from having invested in cryptocurrency or other highly volatile assets in the past or they might have FOMO from having missed out on investments.”
Many younger people had invested in cryptocurrency either because they saw it on social media or their friends were invested or they were seeking higher returns in a low-rate market environment. However, many cryptos had fallen significantly in the past week which was leaving investors burnt.
“[Younger investors] are actually a lot more conservative in how they act than we would think. A good idea would be to offer a basket of assets and then narrow it down based on their preferences.”
Jessica Leung, assistant portfolio manager at BetaShares, said younger investors liked investing in exchange traded funds (ETFs) as they were more diverse and transparent than other assets.
“They are priced out of property so are looking at other ways they can generate wealth. We have seen an increasing number of younger investors buying ETFs, particularly younger and female investors. They want to see exactly what they are investing in and they want to align their value with their investment.”
Bourke also said it was worthwhile that this generation sought out a human relationship who would help them on their journey.
“They should seek a personal relationship, they need someone who can guide them through the market, who can hold them accountable and can keep them on track to meet their goals and objectives.”
Recommended for you
Over half of wealth management clients in Asia-Pacific say they are looking for more advice in investment and financial planning services, according to EY, and may switch or add new providers to achieve this.
As artificial intelligence continues to reshape how the advice industry operates, Adviser Ratings unpacks which areas advisers are using the technology to improve the client experience.
Insignia Financial has appointed the former APAC head of a global asset manager to its board.
Financial advisers have been warned against advising clients to withdraw superannuation for medical or dental treatments as a new report highlights the long-term effect on balances at retirement.