Published On: June 15th, 2021

“Generation I” Seeks Advice, Guidance

Banks and credit unions are uniquely positioned to help a new generation of investors

Many first-time investors – of all ages – came into the market in 2020 flush with stimulus cash and seeking higher returns. Some have chased GameStop, crypto currencies, and other YOLO investing choices, tempted by fast returns but setting themselves up to pay the price with an even faster reckoning. These new investors, which Schwab dubbed “Generation I(nvestor)” in a report released last month, now make up 15% of all U.S. stock market participants. Yet, they have the same aspirations as more experienced investors: planning for the future so that they can realize important life goals. How is your financial institution positioned to help these customers?

It’s been a long time (decades, in fact) since banks and credit unions have seen such a significant opportunity to play a role in the retirement and savings plans of consumer households. According to Bloomberg, as of 2017 U.S. banks held only 22% of total AUM. Generations of savers have been conditioned to view mutual fund providers and discount brokerages as the best places to start investing.

Credit unions and banks, however, with their ability to address lending, deposit, and investing needs are much better positioned to holistically help consumers achieve their goals. Indeed, the Schwab survey noted that 54% of Generation I’s goals included building an emergency fund, and 41% indicated they would keep better track of all of their finances going forward. With the stimulus payments already sitting in deposit accounts, consumers are ready, willing, and able: A Bank of America survey released in early March revealed that 34% planned to save or invest these funds.

As Charles Schwab head of Investor Services Jonathan Craig observed, “…while it’s exciting to see this new generation of investors, the industry now has a call to action – to give this group the tools and services they need to be successful over the long term.” What are you doing to provide your customers with the guidance they need to realize their futures? Moving quickly to show them the right path forward will help you create long-term, loyal customers. Leadfusion stands ready to assist; our savings and investment tools will provide key engagement and organic search benefits for wealth management product pages and campaigns.

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