A tragic thing happened to me last week. I was (gasp!) ma’amed.
No, not maimed. Ma’amed.
While dealing with a very unfortunate chimney repair at my humble Nashville cottage, my two, rather incompetent, repair technicians called me ma’am. Not once. Not twice. But 37 times in one conversation.
It was like having a cold dose of mortality thrown in my face.
Even though I still have the sense of humor of a 12 year old, being ma’am bombed let me know that I have officially hit middle age, which coincidentally may also explain why my “give-a-damn” broke about two years ago as well. They do say, after all, that only little kids and old people tell the truth.
But my brush with ma’am-dom did make me start to think about how the investment industry may change going forward, what with a heaping helping of Millennials headed our way. After all, according to a 2014 Millennial survey by Deloitte, the next generation will comprise 75% of total workforce by 2025. Boomers and Gen X – gird your loins.
Changes That May Be A’Comin’
1) Socially Responsible Investing Will Surge – Although percentages vary from survey to survey, and between income groups as well, one thing is very clear: Millennials are much more open to socially responsible investing than prior generations. In one study of high net worth investors’ attitudes towards socially responsible investing, nearly half of Millennials considered social responsibility when making investment decisions compared with a mere 27% of seniors. In a study of all investors, Morgan Stanley’s Institute for Sustainable Investing found Millennials to be more than 10 percentage points more likely to favor sustainable investing than their Boomer counterparts.
(C) 2016 MJ Alts. Data Source Morgan Stanley Institute for Sustainable Investing
This attention to social factors is likely to boost both the number of products launched to pursue some form of socially responsible investing (ESG, Impact, Mission, Socially Responsible, etc.) and to simultaneously increase the demand for said products. As of year-end 2013, one out of every six dollars invested in the U.S. was already invested in SRI strategies (according to the US SIF Foundation), but it is safe to assume that the demographic shift will accelerate this trend.
The upshot? You might want to get ahead of this trend sooner rather than later.
2) Our Historically Paper and PDF Industry Will Evolve – As luck would have it, I had not one, but two chances to feel old last week. I was speaking with a friend of mine who was extolling the virtues of Tinder. She loved the speed of the “dating” service and the ability to judge people quickly. I then lamented that I missed the days of a good old personal ad.
“You mean like Match.com?” she asked.
“Um, no,” I said. “ I mean like the ones that were in the paper and alternative news in Nashville. You know, Single White Female, blah blah blah…”
“Oh!” she exclaimed. “You mean like on Craigslist.”
“Noooooo,” I said. “I mean printed, paper singles ads. My favorite appeared in the back of the Nashville Scene one day and read ‘Single White Male, fat, ugly and bald, seeks Asian women with long toenails.’ People had to be creative and witty and not just post shirtless bathroom pictures….”
She blinked at me blank-faced in response.
Most Millennials don’t know a world without the Internet or iPhones (or as I like to call them, secular rosaries). Instagram, Pinterest, Twitter, Uber, AirBNB and all sorts of social and disruptive technologies have been at their fingertips (literally) for most of their lives. I can only hope that this comfort with technology leads to some revolution in the investment industry, which has long been dependent on pitch books and PDF one-pagers. I’m not sure what the answer is for this (and God save us from a Tinder app for investments where appearance is everything and substance & due diligence are lost), but there has to be some better ways of doing things than the way it’s been done for the nearly 18 years I’ve been in this space.
3) The Traditional Pathways to Fund Management May Evolve – Does anyone remember the kid that applied to 2,000 private equity firms last year in order to skip an investment banking stint? Have you read any of the many articles on how to get hired into private equity/hedge funds/ venture capital straight out of undergrad? What about the gig economy? Job hopping? Millennial requirements for work-life balance? No matter how you slice it, the bios of next generation fund managers are likely to look pretty different than what we’ve grown accustomed to in the past.
I’m sure there are plenty of other ways that the industry may evolve in the next 10 years or so, but you can bet I’ll be ruminating on at least these possibilities going forward. At least until the re-release of Pretty In Pink hits theaters next weekend. I’ll be hanging with Duckie that day.
