Investing in the future

Transcription

1 Investing in the future How megatrends are reshaping the future of the investment management industry WAISC November 12, 2014

2 What could an investor look like in 2030? We believe that deeply-rooted forces - megatrends - will drive fundamental changes in the investment management industry. In 2030, investors will look and act very differently, presenting significant opportunities yet unprecedented challenges. We believe investment managers should consider how these trends will impact their business. What action, if any, is required today? Which trends do you need to monitor and track? What would you do if the rules of the game change? 1

3 Megatrends The Drivers of Change Demographic trends will magnify the need for effective IM. They will also radically change an investment manager s potential client base. Environment trends are driven by resource insecurities which are changing the nature of investment opportunities and demand for risk protection. They are also increasing the importance of socially responsible corporate behaviors and investment strategies. Social values, behavior and ethics trends are driven by technology and the internet. They will combine to revolutionize how a large proportion of the worlds population interacts, communicates and behaves. Technology developments will continue to act as major drivers of social, economic and environmental change, creating new opportunities and disrupting existing business models. 2

4 Population growth 3

5 Aging population Increased life expectancy and falling birth rates Unhealthy population pyramids in most developed countries Sub-Saharan Africa could be the only population not aging by 2030 Responsibility for retirement provision will increasingly shift to the individual A considerable healthcare and retirement burden is being created. 4

6 Demographics: Developing world Emerging and developing economies in the East and South are growing in power, influence and potential Asia s global economic power expected to surpass North America and Europe combined by 2030 China is expected to overtake the United States as largest economy, based on purchasing power parity before 2030 Influence of eastern and southern economies likely to bring significant religious and cultural shifts. 5

7 Demographics: Growing middle class Middle class will continue to grow considerably More people will be middle class than poor by 2022 Middle class growth to be particularly strong in emerging markets Trend is changing production and consumption dynamics of the world economy. 6

8 Life events More life events and more varied financial requirements Couples are: - having children later - financially supporting children longer - providing for elderly parents Work life is changing with more frequent: - employment breaks - changes of career - international assignments 7

9 Social media Social media has transformed how information is disseminated and how consumers, businesses and governments interact One in four people use social online communities, networks and platforms By 2030 social media could replace traditional media and information sharing mechanisms, and be integrated into corporate IT platforms Investment managers could use social to improve client relationships. 8

10 Immediacy 9

11 Simplicity and transparency 10

12 Technology: Pace of change Rapid technology adoption exemplifies the information technology revolution New technologies are adopted faster and innovation cycles are shortening Diffusion rates are increasing in developed and developing countries This trend will only intensify. 11

13 Connectivity and ubiquity 12

14 Data growth Five exabytes of data was created every 48 hours in 2010, more than had been created in all of history until then Data provides valuable insights into client behavior and needs Organizations can tailor information and service models to create a key source of competitive advantage The key challenge is capturing and leveraging the data effectively. 13

15 Implications for investment management

16 Engagement levels Individuals will increasingly need to engage and plan for their retirement Experiential learning and reduced inter-generational wealth transfer will force the issue and change attitudes Three types of retail investor are likely to emerge: - highly engaged, self directed - time poor and looking for professional support - uninterested or looking for someone to take away the problem. 15

17 Clients: Investor diversity The clients of tomorrow are likely to be very different to today, presenting opportunities and challenges: - generational shifts: the industry needs to engage younger generations and capture clients earlier - gender shifts: women will be increasingly important clients - wealth shifts: the developing world s growing economic influence will alter the cultural and religious landscape. 16

18 Brand management What does your brand say about you, and how will this need to adapt for to attract tomorrow s investor? 17

19 Data & analytics Data is increasing exponentially yet is typically disparate, inconsistent and difficult to interpret This issue will only increase as new data feeds are integrated into corporate systems Digital strategies will be critical to target and service an increasingly diverse client base in 2030 Investors can access significant real-time data, so data is no longer exclusively in the professional investment manager s domain. 18

20 Core platform 19

21 Client relationship control 20

22 Outcomes, aggregation & education 21

23 New entrants What if? 22

24 For more information and insights: Nik Assanand Partner, GVA Leader of Investment Management and Funds KPMG LLP 777 Dunsmuir Street Vancouver, BC V7Y 1K3 Office: kpmg.com/socialmedia 2014 KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.