EXPERT INSIGHTS – Gen Passive & the Rise of the Millennial Investor

There will be “huge ramifications” for financial analysts and fund managers who work in the active investment industry

Jay Pelosky
Principal @ Pelosky Global Strategies

The massive generational group of Millennials will accelerate the seismic shift to passive fund management as they seek to grow and protect their wealth, costing the jobs of more stock-picking professionals, according to investment specialists.

Jay Pelosky, principal of New York-based Pelosky Global Strategies, said the Millennials’ greater experience with technology compared with Baby Boomers, distrust of so-called “experts” since the 2008-09 financial crisis and debt burdens from university education, meant they were attracted to low-fee automated investing such as exchange-traded funds (ETFs) and robo advice.

Millennials are generally defined as people born between the early 1980s and the turn of the millennium. They are also known as Gen Y or the Digital Generation. The size of the cohort represents a potential lucrative market for the financial investment industry.

More Millennials (33 per cent) are invested in ETFs than investors on average (25 per cent), a BlackRock survey published in January said. About 70 per cent of Millennials planned to invest in ETFs in the next 12 months, compared with 52 per cent of overall investors.

Jay coined the phrase “Gen Passive” a year or so ago to highlight the rise of the Millennial Investor demographic. Jay believes this age cohort will impact the investment management ecosystem much as its predecessor generation, the Baby Boomers, did. When one thinks of the Baby Boomers and investing one thinks about the rise of mutual funds and firms such as Fidelity and Pimco. What will the rise of “ Gen Passive” mean? Watch Jay Pelosky‘s views on Jobs in ETFs channel.

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