A global study conducted by KPMG has found fund managers are ignoring the Generation Y demographic, with only half the industry focusing on this age group.
The key finding of the study, Beyond the Baby Boomers: The Rise of Generation Y, was that many in the funds management industry are unaware or unprepared for generational change impacting their customer bases and employees.
The study took in 17 countries, collating 125 responses from businesses accounting for 20 per cent of global funds under management and utilising focus group research of Generation Y participants in London, New York, Tokyo, Frankfurt and Sydney.
It found that while the Baby Boomer set, individuals aged 40 to 59, had driven wealth accumulation over the last 20 years, this demographic would begin to contract in the United States from 2013.
Despite this, the study indicated only 50 per cent of fund managers were actively targeting Generation Y clients.
It found 28 per cent of respondents intended to grow their focus on Generation Y clients over the next five years and 22 per cent had been focusing on this client base in the last two years.
The report suggested widespread agreement within the funds management industry about what Generation Y clients want: mutual funds and equities, but there was a split on how best to approach this market, with most responses spread across nine different strategies.
“This is an industry that knows its products far better than it knows its future customers, or how to engage them,” the report said.
According to Bernard Salt, KPMG Australia partner, the report highlighted how the industry had received a boost from the ageing population, but this peak was beginning to recede.
“The industry must take stock, examine its position and recalibrate its trajectory to align with the rise of Generation Y as wealth creators and wealth inheritors if it wants to continue to grow and prosper,” he said.
