Demographics and Cultural Shifts That Are Driving the Demand for Investment Services

Date:  2021-04-26 02:14:35
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Demographics and Cultural Shifts That Are Driving the Demand for Investment Services While a Huge Majority of Qualified Financial Advisors are Nearing Retirement

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Demographics are the unique characteristic of a population. These include race, age, and sex. There are numerous uses of methods of demographics of a population as they allow the party interested to learn more about the community for the efficient decision-making process. In finance or business, the demographics are to aid in economic market research, for instance, a company that sells low-end clothes and is hopeful to know how many people are nearing retirement age and what percent may or may not buy the product. On the other hand, cultures are beliefs and values that a particular group in the population hold and detects their behavior in all aspects of life (Skolnick, 2008).

The Baby Boomer generation is here demanding equal rights, and opportunities for both Gen Y and Gen X as both genes take similar responsibilities in the global economy. The new trend has led to the average investor base profile to change drastically. Apparently, they are the ideal representation of the next big wave assets shift management industry investors. The financial market is calling them the Millennial. The baby boomers are creating a radical change in the demographics of the client, as well as the change in behavior and expectations. Thus the investment market in anticipation of this new market is making adjustments to accommodate the shift as they hold great importance to the management of assets. The baby boomers are coming in, and the qualified financial advisors are moving out. This paper is aiming for the examination of the challenges of these two shifts that have left a gap in the financial world (PWC, 2014).

Major Challenges

The greatest challenge the gap has created is the information problem where information and opinion shortage is apparent. There is an impending advisor shortage as the qualified consultants leave and the baby boomers come in. Consequently, the information is moving with the experienced financial advisors, and the baby boomers are not ready for the commercial market demands. Worse still is the fact that the financial advisors are leaving no one to take over their role as the new generation is very unwilling to join the managers of wealth. They are attributing their decision on stigmatization of salesmanship, the outdated technology, and models. Whatever their reason may be for not joining the industry; they are creating instability in the financial market where information is paramount for sound decision-making. The youngsters are opting to get involved in brokerage, budget analysis and bankers rather than working with the older generation by pursuing CFP (EY, n.d.).

The GAP may result in the collapse of the financial markets as the new shift in investment with the baby boomers taking over investments call for the new form of financial literacy. It is virtually impossible to advance in financial literacy yet fail to have the basic old ideas. The eminent failure of the new business students to take a career in the financial market is detrimental to the survival of the stock exchange as we know it. The baby boomers are accumulating wealth and as a result demanding for financial advice and education. There being no one to provide it; the source of information is now social media, family, and friends who have no sufficient knowledge of the financial market (EY, n.d.).

The GAP created is hindering the expected growth from the market. Demographics and cultural shifts are simultaneously increasing the demand for investment services, but there is the thinning of qualified financial advisors. The baby boomers coming has called for more financial management of assets and would contribute to a 32% growth in the economy in the next decade. However, the current simultaneous aging and retirement of financial advisors (Fas) has drastically reduced the numbers that would service the growth by 4.3% over the last decade. Therefore, it is crucial for organizations that hope to grow shortly to pace with the growth of the industry thus the heirs, and the baby boomers, need to understand fully the next gen drivers as the pose a challenge in the management of assets (EY, n.d.)

The financial market is dependent on information flow for its very survival. The lack of that information create gaps that hinder the market growth, cause risk of failure, and contributes substantially to information lag in the financial systems. There is the need for the old generation to shift strategy and encourage the younger generation to join their cause. It can be done through the advancement of technology, the establishment of mentorship programs, and by realigning the structures of compensation. The strategies are practical and will go a long way to saving the worlds economy (PWC, 2014).


There is the transitional challenge to the new trend. The two generations need each other to transition the growth of technology. Consequently, the new shift will demand more from the older generation, and that generation will hope to get support from the younger generation for that entire shift to the baby boomer era of investment. The transition to the new markets will probably fail with the current gap created by the two generations. The older will retire with their information, and the younger generation will have their technology that is meaningless without information to sustain it (PWC, 2014).


Skolnick, J. H., 2008. Enduring issues of police culture and demographics. [Online] Available at:[Accessed 3 April 2017].

EY, n.d. The next generation of Financial Advisors. [Online] Available at:$FILE/EY-the-next-generation-of-financial-advisors.pdf[Accessed 3 April 2017].

PWC, 2014. Millennials and their impact on the investment management industry: Innovators in investing. [Online] Available at:[Accessed 2 April 2017].

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