Fintech and ESG will change the face of asset management

Half of assets under management by 2030 will belong to millennials and those in the so-called ‘Generation X’, meaning asset managers will have to adapt their offerings to suit customers’ social values, Luxembourg fund experts have said.

The Association of the Luxembourg Fund Industry (Alfi) and business services firm Deloitte predict a boom in robo-advice and a change in tailored portfolios, and say these will also cause a shift in marketing strategies.

In a report – ‘How can Fintech facilitate fund distribution?’, which is published by Alfi and Deloitte – the two organisation forecast a sharp move away from traditional investment in oil and gas, to clean-energy industries such as solar and wind as investors seek to align their investment portfolios with their social and economic values.

Alfi and Deloitte also said millennials will have a more ‘do-it-yourself’ attitude to investing as over 50% of investors interviewed cited a lack of trust in advisers and a belief that better performance could be obtained from self-directed investments.

This is driving the next generation of investors to turn towards robo-advisers who, according to the report, will manage 10-14% of assets in the US by 2025 – up from the less than 0.1% of the €29 trillion in assets there today.

Denise Voss, chairman of Alfi, said: “These behaviours will be a driver for change and the investment management industry has a unique chance to respond to these positive opportunities.”

©2016 funds europe