It is increasingly becoming obvious that millennials prefer being self directed in their choices, trusting peer review forums more than product brochures. Within their investment decisions this is becoming more prevalent as non-intermediated investments continue to tick up. Asset managers who do not embrace this trend will struggle to gain and retain market share. Not only are the number of self directed investors increasing the number of advisors specifically independents in the industry are projected to decrease as regulatory changes under the “Twin Peaks” model are implemented in South Africa.
The availability of low cost investment alternatives specifically Exchange Traded Funds, coupled with an easy to invest online application process which is user centric are providing further impetus to a changing landscape. Looking beyond migrating existing businesses away from legacy systems. It does beg the question why are firms hesitant to embrace a market which inherently is low maintenance yet has the potential to be a sustainable profit generator?