CFA Society India, one of the 147 CFA Institute member societies, jointly hosted its annual Putting Investors First event ‘Rethinking Financial Services for Millennials’ in association with the Institute of Chartered Accountants of India (ICAI) and National Securities Depository Limited (NSDL). Putting Investors First is a global CFA Institute initiative and part of the Future of Finance program that aims to raise awareness and build support for aligning the interests of investors and their customers in a way that fosters trust and improves outcomes for investors.
The event featured two power-packed panel discussions on the state of the investment profession and its preparedness in serving millennials. Panelists included — Navneet Munot, CFA, Chief Investment Officer, SBI Mutual Fund; Kalpen Parekh, Joint President, DSP BlackRock AMC; Ravi Subramanian, Author, If God Was A Banker; Mandar Mhatre, Entrepreneur and Investor; Partha Iyengar, Co-Founder and Managing Partner, Life & Money; Amit Kumar, Partner and Director, The Boston Consulting Group; and Talvinder Singh, Product Head, Flagship, OYO Rooms .
What experts’ say:
· “What millennials are looking for is ease and convenience in investment. It’s important for the industry to bring more simplicity in processes / documentation to attract them. Government should consider bringing a scheme for investment in equities called Jan Nivesh Yojana along the lines of the Jan Dhan Yojana to attract millennials.”
– Navneet Munot, CFA, Chief Investment Officer, SBI Mutual Fund
· “Most millennials’ large investment decisions are emotionally driven; hence we need to understand and guide them on their investment requirements.”
– Partha Iyengar, Co-Founder and Managing Partner, Life & Money
· “It is a welcome change to see millennials increasing interest in savings and investing at a younger age as compared to earlier generations. This trend is positive and further educating these potential investors about various investment options will be important.”
– Mandar Mhatre, Entrepreneur and Investor
· “We need to engage with millennials and make them aware about investments, especially when markets are high.”
– Kalpen Parekh, Joint President, DSP BlackRock AMC
In its recently released the Future State of the Investment Profession study, CFA Institute describes an investment industry at an existential crossroads and warns that investment industry leaders who fail to transform their business models may jeopardise the future of their firms.
“Nearly 30% percent of India’s population was born between 1980 and 2000. Compared to earlier generations, millennials save, borrow and invest in ways that differ significantly from older consumers. Investment industry leaders need to make decisions over the next five years that will not only impact their firms but also the entire landscape of the investment profession as we know it. Ultimately, Putting Investors First is about creating the right products and giving sound advice,” said Jayesh Gandhi, CFA, President, CFA Society India.
Key Survey Findings
The views of more than 1,000 investment management professionals, including CFA charterholders indicate that significant change on all fronts lies ahead over the next 5-10 years:
Changing Investment Trends
- 73% expect environmental, social, and governance factors will become more influential
- 70% expect financial centres in the Asia-Pacific region will become more influential
Business Models Facing Pressure
- 84% expect industry consolidation
- 70% expect to see more assets going into passive investment vehicles
- 63% expect profit margins at asset management firms to remain flat or to contract
- 57% expect institutional investors will look to reduce costs by in-sourcing more investment management activities
Opportunities on the Horizon
- 55% expect globalisation will offer new opportunities for investment professionals, while 18% perceive globalisation as a threat
- 49% expect technologies will present new opportunities for investment professionals, while 23% see new technologies as a threat
Among the megatrends identified are technological advances, redefined client preferences, new macroeconomic conditions, different regulatory regimes reflecting geopolitical changes, and demographic shifts. The scenarios are not forecasts but include possibilities for the future state of the investment industry.