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Gen Y, social media, the fund industry and NICSA

July 19, 2011

I’ll admit that I’m skeptical of claims that the Gen Y’ers — or the Millennials, as they’re often called — are somehow fundamentally different from Baby Boomers. Yes, Millennials may not behave like their elders right now, but is that they because they were born in the 1980s rather than the 1950s — or simply because they’re in their 20s and not their 60s? I somehow remember that I was just like them when I was their age: optimistic, confident beyond my abilities, questioning of authority, eager to make my mark on the world.

Still, there’s at least one thing about Millennials that represents a radical departure from the past — their comfort with technology. They played video games as toddlers and texted as soon as they could write — or, more accurately, type. They’ve never known a world without cell phones or the Internet. (Sad to say, I remember the day when TV remotes and VCRs represented radical innovations.)

Eye Contact -- Millennial Style!Millenials’ reliance on technology is amazing in and of itself — but what’s even more important is that the technology allows them to keep in touch with a very broad community. They can Tweet a group of friends about plans for the evening or ask all of their classmates for advice on Facebook about a potential purchase — from wherever they are, be it at home or school or work. That’s not the world we Baby Boomers knew when we grew up — when we had to fight our parents and siblings for access to the single household phone line and when it was much harder to maintain relationships after you moved or went off to college

At the NICSA Midwest Luncheon Workshop last week, keynote speaker D. Bruce Johnston, President and CEO of DBJ Associates, made the case that this new connectedness has profound implications for the fund industry — both in its current operations and for future growth.

It’s important today, because Millennials are already becoming a big factor in the job market. In just 7 years they will make up half of the working age population. Firms that want to attract the best talent will need to promote themselves in the social media forums that members of this generation are comfortable with.

Connectedness will be important to the fund industry tomorrow because — while Millennials don’t have a lot of money now — they’re just starting to accumulate assets. Their incomes will be rising steadily from here on in, and they may very well also start inheriting substantial amounts from their parents and grandparents. This up and coming generation is also very financially savvy — 75% of them already have positions in mutual funds and 85% own individual stocks — and they see social media as a good source of financial information. They’re much less likely to trust a financial adviser.

In short, the fund industry ignores social media at its peril!

NICSA members are hearing the message. We recently took a look at social media activity by our members:

  • Roughly 4 in 5 have a presence on LinkedIn; we’re assuming that’s because their associates are posting their own profiles there.
  • Almost half have an active presence on Twitter.
  • Facebook is least popular; only in 1 in every 5 of our members is represented in that channel.

As the fund industry goes, so goes NICSA. We’ve begun posting content in each of the major social media channels — so that we can both stay abreast of the latest trends and communicate with all of you in the way that you like best.

We’d love to hear from you on what we’re doing right and what we need to do more of. Leave a comment here, or send us an e-mail at info@nicsa.org.

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