Young investors—those under age 30—account for nearly 10% of affluent investors in the United States, but mutual fund companies aren’t doing enough to get in front of those consumers.
A study released March 18 by Cogent Research found affluent Gen Y investors don’t have a clear understanding of mutual fund companies’ offerings, or even the brands themselves. Overall, affluent investors recognized an average 10.6 mutual fund companies, but the younger age group only recognized 5.3 brands.
That lack of recognition is the result of a gap in the way fund companies engage with consumers and the way young affluent investors consume information. The survey found younger investors were “far less likely” than older respondents to recall recent advertising from fund companies. Investors under 30 were nine times more likely to develop a relationship with a fund company through social media and twice as likely to rely on an advisor’s recommendation for a product provider.
“If you want to gain a quick appreciation for how different Gen Y is in the way it consumes information, simply ask a 20-something how they get their news, stay current with their favorite programs and learn about new products,” Meredith Lloyd Rice, Cogent Research senior project director and author of the study, said in a statement. “The chances are high that TV commercials, newspapers and radio won’t even be part of the equation.”