Where do you get your investment insights? A quick flick through Facebook, Twitter, TikTok, WeChat or the broadsheet newspaper’s financial pages?
According to the recent Deloitte 2020 Investment Management Outlook the world of investment management is undergoing a significant amount of change. Client reporting is, notably, expected to be affected dramatically.
There is a significant potential growth opportunity with a large shift occurring in the demographics and geography of investors. On the one hand, there is a growing population of older and increasingly sophisticated investors who are demanding greater insight into their pension investments. Firms also face the challenge of meeting the needs of a rapidly growing market of dynamic younger investors that are socially aware digital natives. These younger investors want immediate answers to complex investment questions, including everything from the performance of sustainable and green investments, through to the IPOs of exciting new media companies.
Older investors have been customers of the investment industry for many years and are well understood. However, they are becoming better informed and expect on-demand access to their portfolio with sophisticated performance analytics 24x7. They are also more willing than ever to move supplier to get the service they expect. This will lead to competitive demand for more accurate, complete, instant and complex portfolio analytics. The future industry-leading firms in this client segment will be the ones that spend more resource on understanding their customers' needs and expectations and improve the analytics and timeliness of their services.
Younger investors are the future source of growth for the industry. Most are not yet customers and as such are not yet well understood. They have a very different outlook, influences and expectations. Communicating and capturing business from this group could be via a 7 second TikTok video promoted by celebrity influencers rather than the traditional sponsorship of a Golf Tournament, Snow Board championship or music festival. Capturing their attention, communicating effectively and building a strong set of social media followers are all key challenges. In this market, projecting an image of stability and tradition could be viewed as out of touch and old fashioned.
Ensuring your marketing and client communication resonates with these investors will require a change in mind-set. Firms will need to shift their focus to markets where rapid economic and population growth has led to a boom in both young and wealthy consumers who could be tomorrow’s investors. Traditional investment management firms need to embrace this shift in geography and culture, and understand what resonates with these new investors.
The challenge for Investment Management firms is how to maintain and grow their business with both of these older and younger groups, as well as all the other consumers in-between these age groups and across a diverse set of cultures. Firms will want to ensure that their communications meet all the relevant compliance hurdles, whilst also getting their message across in a clear and effective way. The next ten years will see a dramatic change in client communication analytics and technology. The key for investment managers is to establish the right relationships with the right partners to ensure that they navigate this evolution as effectively as possible. Firms will need to embrace young people both within their organisations and externally, as well as those who might, most importantly, be potential clients. Why train middle age marketers on digital youth culture and young people’s ethical ideals when firms can put young people in control and train them on investment management?
Firms will need to adopt a dynamic, agile, and youthful approach to their communication in order to thrive in the face of these new consumer demands. Sophisticated on-demand analytics will be required with a pivot to growth economies and populations. Deloitte Investment Management Risk Analytics is uniquely positioned to help advise, navigate and assist in finding the right solutions and partners in this complex global market.