Younger Clients Want More Investment Product Options, Survey Says

The future success of financial firms rests on hiring the right talent to handle new products for a younger clientele, according to a new survey by the Money Management Institute and Broadridge Financial Solutions.

The survey of 175 Money Management Institute members found that the number of wealth managers—those doing clients’ overall planning—who are asking asset managers to hire more product specialists has doubled in the past year. 

Seventy-four percent of wealth managers called on asset managers to invest more in product specialists in the new survey, which was up significantly from 38% in 2023. Sixty percent of asset managers said they plan to make this investment, with a primary focus on adding specialists for alternative investments, private markets, and non-traditional products.

“Our survey found that product lineup is one of the top three characteristics that sets best-in-class asset managers apart from others, so being thoroughly prepared to meet these demands is mission critical,” Craig Pfeiffer, president and CEO of the Money Management Institute, said in a statement. “As such, building and resourcing the right product specialist teams will be instrumental in helping asset management firms stay ahead of the curve.”

Broadridge is a global fintech firm with more than $6 billion in revenues that provides the infrastructure that powers investing, corporate governance and communications for financial firms. The Money Management Institute is a financial industry association that represents financial services firms.

Because they are not adopting new, specialized products, asset managers may be leaving money on the table by not converting mutual funds into ETFs, the survey found. Slightly more than half of managers want asset managers to convert mutual funds into active ETFs, compared to only 35% of asset managers who said they plan to do so.

Wealth and asset managers agree that younger generations will require different products and service models, but only 34% of both groups are preparing to re-orient their growth strategies to address this demand, the survey said.

“The investment management landscape is rapidly evolving due to an influx of younger investors and unsteady markets forcing wealth managers to look at newer, non-traditional products for alpha generation. As a result, asset managers now more than ever have an opportunity to provide innovative products and onboard the right talent to meet the demands of today’s investors,” Tim Kresl, principal of distribution insight at Broadridge, said in a statement. “Our survey reveals that the future of investing is in newer products in private markets and active ETFs, and asset managers can strengthen relationships by providing the right products and services.”

Eighty-three percent of wealth managers agreed that their vision is to offer these products as an integrated component of an overall portfolio versus standalone investments, compared to 65% of asset managers who held the same view.