Younger people are becoming more interested in investing, and people in the 25 to 34 age group will be the types of investors that financial advisors should court and focus on, according to Morningstar CEO Kunal Kapoor.
In Monday’s opening keynote address at the Morningstar Investment Conference, Kapoor told attendees that “the type of investors [he’s] seeing on morninstar.com has changed meaningfully,” with the 25-34 age group vying for the top spot of the site’s top visitors.
“This is not the regular type of investor we saw 10 to 15 years ago,” he said. “It’s the type of investment that will power your business in 10 years, in 15 years.”
Added Kapoor: “We have the tools to personalize your practice to scale. The time is right for personalized conversations with your clients. Active personalization is the new active investing.”
And the research is showing that Millennials and Gen Z are indeed saving more and investing at earlier ages than previous generations (not to mention actively seeking the advice of financial professionals). Among millennials, 31% began investing before they turned 21, versus 9% of Baby Boomers and 14% of Gen X. In addition, one in four millennials who save has more than $100,000 in savings.
Among the new tools from Morningstar to help financial advisors serve their clients is an updated research portal that will debut in the third quarter; new risk measurement tools, including the Morningstar Portfolio Risk Score and Risk Comfort Range; and Morningstar Direct Indexing.
The Morningstar CEO added that advisors also need to understand that sustainable investing is what most younger investors currently want.
“Advisors that provide clients with ESG resources are five times more likely to have a conversation with their clients about sustainability,” he said. “You need to have these clients; these are the clients likely to grow with you over the next ten years.”
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