Paradigm Shift Looming: Investment Management Industry Must Change Direction to Engage Generation Y

(TORONTO, ON, October 25, 2007) – The global investment management industry needs to increase its focus on “Generation Y” (investors now in their 20s), according to a new study by professional services firm KPMG.

The study, entitled ‘Beyond the boomers: the rise of Generation Y: Opportunities and Challenges for the funds management industry,’ finds that 78 percent of industry respondents have failed to take definitive action over the past two years to target and engage Generation Y about their offerings. Moreover, over the next five years, only 50 percent 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 per cent of respondents admitted that they see this demographic as their future employee base, while only 33 per cent admitted to perceiving Generation Y as their future client base.”

Furthermore, 69 per cent of survey respondents acknowledge they need to gain a far better understanding of their current Generation Y employee base. When asked how best to target this demographic as future customers, responses from the funds industry were highly variable, with no clear consensus demonstrated among them. Responses ranged from: advertising (33 percent), distribution techniques (27 percent), market research (26 percent), educational programs (23 percent), financial planning (23 percent), new technology (22 percent), product development (22 percent), and communication (21 percent).

“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.”

Additional information

A more comprehensive presentation on the study findings will be presented at the, ‘ICAC 2007 Conference & Annual General Meeting: Future Trends of the Canadian Asset Management Industry Within A Global Environment,’ today at the Toronto Board of Trade.  Speakers include: Bernard Salt, Author of the study along with Paul Gardner of Avenue Investment Mgt., and Pierre Quiment, from UBS Global Asset Mgt. The proceedings key note luncheon address will be given by the highly regarded veteran Canadian diplomat and humanitarian Stephen Lewis.

About KPMG in Canada

KPMG LLP, a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm affiliated with KPMG International, a global network of professional firms providing Audit, Tax, and Advisory services. Member firms operate in 148 countries and have more than 113,000 professionals working around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

About the ICAC

The Investment Counsel Association of Canada is the representative organization for Investment Counsel and Portfolio Managers in Canada. Member firms are only in the business of managing investments for clients in keeping with each client’s needs and objectives and risk tolerance. The Association was founded in 1952 and its current membership is responsible for managing in excess of over $500 billion in client assets.


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Shilpa Kotecha
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