Recently, I was quite taken aback to be asked, “Mum, have you heard of [insert name of well-known trading platform]?” from my 16-year old.
“Er, yes, why?”
“Because I’m thinking of opening an account with them!”
Now, I’m all for getting Generation Z to engage with their finances. Indeed, reaching a younger base is an aim we share with a lot of financial services firms. The much-touted intergenerational transfer of wealth is something that the industry has been talking about for a long time now. What I hadn’t banked on was how many of the much younger generation are doing it for themselves.
Unfortunately, they are not taking their cues from the balanced, sensible advice being offered by the stalwarts of the UK financial services industry; rather from reality TV celebrities and similarly financially un-savvy people.
They are also (horror!) not taking a long-term, considered approach to investment. Well, no surprises there, they are teenagers. Instead they seem to favour daily trading, particularly forex.
I tried to explain to my son that his friends couldn’t be trading forex because you have to be 18, so he then proceeded to show me his Snapchat feed, and I saw that indeed forex trading does seem to be a big trend among very young people.
That former Love Island stars are promoting this type of high octane, short-term trading (including launching their own forex businesses) sends a dangerous message to impressionable young people. Yes, money can be made in the short term, but money can also be lost, very quickly – and a lot of it.
Copying other traders’ strategies and ‘learning how to trade’ are popular methods of luring in the young folk. Of course, often hand-in-hand with pictures of flashy watches and a mythical, ‘Fyre Festival’ lifestyle.
Instagram and Snapchat are full of this type of stuff. There needs to be a counterpoint. The secret is to make the message about long-term, sensible investing equally as attractive to younger people (and I do mean under-18s as well, otherwise we’ll lose them to the quick-buck merchants.) Credibility is one part of the puzzle. The second part is to deliver it in such a way that they will see it and take notice of it. Relying on a corporate website these days, no matter how groovy, just doesn’t cut it.
It’s all very well creating a fantastic programme aimed at younger investors. The key is to make sure that they actually encounter it by communicating it effectively.
As an industry, we’re at the beginning of a long journey when it comes to educating younger people in a way that resonates with them. It’s something we’ve been discussing more here at Quill. There is a lot of work to do, but cracking the code of reaching younger investors something we are keen to play a leading role in.