Workplace Challenges
Keeping up with change is good businessOne thing that is constant in any workplace is change. |
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 [ 2007-10-31 ] |
If the technology isn’t changing, then the management style is. Or the product or service is being revamped and overhauled. New employees are on their way up the ladder, others are in transition and some older employees are faced with retirement decisions. The list goes on.
In the world of investment management, a recent study has shown that while customers looking to begin an investment portfolio are changing, the industry is not keeping up — in some cases not even realizing who the newest customers are and how to tap into that client base.
The study, by professional services firm KPMG, shows that the global investment management industry needs to increase its focus on Generation Y investors, who are now in their 20s.
It found that 78% of industry respondents have failed to take definitive action over the past two years to target and engage Generation Y about their offerings and that over the next five years, only 50% of respondents intend to direct their resources toward targeting this demographic.
“As all industries are being affected by demographic shifts, the fund industry has largely been focused on Generation Y as employees as opposed to consumers,” says Bernard Salt, author of the study and a KPMG partner.
“So it is not surprising that when asked about the relevance of this demographic to their long-term profitability, 56% of respondents admitted that they see this demographic as their future employee base, while only 33% admitted to perceiving Generation Y as their future client base,” he added.
The study also found that investment managers don’t agree on the best way to engage the Generation Y investor. When asked how to target 20-year-olds, the responses were varied: advertising (33%), distribution techniques (27%), market research (26%), education programs (23%), financial planning (23%), new technology (22%), product development (22%) and communication (21%).
“The study findings seem to suggest the industry has understandably been focused on our biggest client: the baby boomers,” says Katie Walmsley, president of the Investment Counsel Association of Canada. “We clearly have to rethink traditional business models to engage this up and coming investor.”
Change for the sake of change isn’t necessarily a good thing. However, recognizing a changing client base is crucial, especially in the approaching era of the retiring boomer. And educating prospective consumers is paramount to maintaining market share and keeping a positive bottom line, no matter what industry you happen to be in.
P.J. Harston is Sun Media’s National Business Editor. Reach him by e-mail at Pj.harston@sunmedia.ca, read more of his columns on Canoe’s Money website or on his blog at blog.canoe.ca/funbiz
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