September 29, 2023

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They have more money and are not afraid to use it – they will be future investors

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Despite a significant increase in the number of asset managers during epidemics due to increased investor activity and good market performance, the industry faces significant challenges in terms of cost pressures, market and interest rate risks, competition from new entrants and aging and declining advisers. In terms of head count.

U.S. asset managers’ profit margins fall 11% in 2020, source: McKinsey

The Recent analysis by McKinsey According to him, the US asset management market is expected to grow at an annual rate of 5% over the next 5 years, but this time the number of investors is likely to change significantly, with some groups showing significant growth.

According to the report, these are three groups of investors

  • For women
  • New investors opening a bond account for the first time during epidemics, and
  • For hybrid affluent investors with financial advisors and online investment accounts in the traditional sense.

Women are advancing

According to McKinsey’s analysis Women already own 33% of the property. About $ 12 trillion in the United States. That amount and proportion will only increase over the next ten years, because, unfortunately, more men born between 1946 and 1964 will spend their wealth on their wives, often younger, with longer life expectancy left.

By 2030, the consultant estimates that a significant portion of the $ 30 trillion in the hands of child boomers will already belong to American women.

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Anyway The number of younger and richer women will also increase In the market, McKinsey figures show a growing interest in finance, with the number of married women making investment decisions increasing by 30% over 5 years ago. However, women do not have to earn the same investment as men, for example, many are more concerned with the well-being of the family than the efficiency of the investment, so this does not affect the trustees. Get ready for this in the future.

New investors

Since the beginning of 2020, more than 25 million new brokerage accounts have been opened in the United States.In addition, many of these accounts have been opened by new market entrants.

McKinsey notes that this dynamic growth is unlikely to last long, but new investors will carve out a significant portion of it over the next decade because it has a very low average age of 35. Group.

Highly affluent investors and hybrid asset management

More and more convenient investors are choosing a hybrid form of asset managementIn addition to financial advisors, they also have their own investments to manage.

Last year, one-third of affluent households with investment assets of more than $ 250,000 but less than $ 2 million were cross-invested, an increase of 9 percentage points over three years, the study said. Asset managers who help their clients with online accounts and personal advice will be in a better position in the future.

Other habits have been altered by the corona virus

The data also show that the way wealthy investors seek property advice in the future has changed dramatically as a result of the epidemic. Only 15% of respondents plan to return to branch counseling. In contrast, about 40% of those with more than $ 2 million in assets prefer telephone or video conferencing as a way to negotiate.

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Alternative investment vehicles are also increasingly appearing in portfolios. According to McKinsey, about 35% of 25-44 year olds are more interested in opportunities such as investing in private equity, real estate, infrastructure or natural resources.

Also, more and more people are looking for digital devices such as crypto devices, tokenized stocks, staples or digital works of art.

Use different counseling models according to age

Cover image: Getty Images