Jedi Knights, Millennials, and other Census tales
Yes, it’s that time again. Every four years, we get to pore over the Census results and see how the picture of Australia has changed.
As you can imagine, collecting and analysing the data from 25 million people and 10 million households is a mammoth exercise, which is why the Australian Bureau of Statistics releases its findings in a staged approach, starting in June 2022 with high level housing and population data, continuing with labour force and location-based analysis in October 2022, and more complex socio-economic analysis to be released mid 2023.
Along with discussions about the seemingly reducing importance of religion to Australians, (I’m not sure how many people identified as Jedi Knights this time around), the main story from this census is about the rise of the Millennials, who, as a group, are now the same size as the Baby Boomers – each representing around 21.5% of the population. Sandwiched between those two groups is Generation X, who accounts for just over 19% (see Figure 1, below).
Understand the trend and stay ahead of the curve
Digging deeper into data can help businesses – including financial advice firms – stay ahead of the curve by understanding trends, anticipating customer needs, and adjusting their proposition and client experience accordingly.
For example, the prominence of the Millennial group, and their increasing difficulty in entering the housing market, has seen rapid growth in demand for renovation/home improvement products that can be used in rental properties (such as stick-on picture hooks and bathroom accessories).
For financial advisers, the rise of the Millennials, the oldest of which are about to turn 40, could well be the catalyst to rethink the importance of this segment. Afterall, as well as being the biggest spending group, the Millennials stand to benefit from the great intergenerational wealth transfer starting to unfold.
Of course, the Census is just one of many data sources that can give advisers a glimpse of the future. Other, more finance specific, research can be equally, if not more, powerful in helping advisers anticipate the evolving needs of clients.
And when we broaden our data horizons, we can see that, arguably, a more fundamental trend unfolding is the increasing power of female investors.
The rise of the female investor
Much has been made of the growth in female investor numbers – especially younger females – since the start of the pandemic.
According to the ASX [2], 2020 saw women make up 45% of all new investors in Australia – up from 31% among those who started five to 10 years ago. And this trend appears set to continue, with women accounting for 51% of those planning to invest in the future.
These findings are reinforced by Investment Trends’ research[3], which identified the role of young women in driving growth in exchange-traded fund (ETF) investing (with the number of female ETF unitholders nearly doubling to 423,000 in 2021, and the biggest growth among 18-34 year old females), and in online investing more generally (with the proportion of online investing accounts opened by females more than doubling over the last 5 years[4]). Indeed, according to micro investing app, Sharesies, 60% of its customers are female[5].
The same trends have been observed globally too, with research by trading platform eToro[6] suggesting that 42% of current female investors only started investing in 2020 or 2021. Like Australia, it is younger females accounting for much of this growth.
To continue reading and receive CPD points, view the original article on AdviserVoice’s website.
[1] https://www.fpmagazine.com.au/2021-australian-census-384358/
[2] https://www.plum.com.au/news-information/news-updates/rise-of-female-investors#:~:text=Women%20made%20up%2045%25%20of,of%20those%20planning%20to%20invest
[3] https://www.investordaily.com.au/news/50972-female-etf-investors-on-the-rise
[4] https://www.firstlinks.com.au/women-investor-numbers-grow-financial-education-lags
[5] https://www.smh.com.au/business/banking-and-finance/not-in-it-to-make-a-quick-buck-young-female-investors-on-the-rise-20220623-p5avzz.html
[6] https://www.smartcompany.com.au/finance/pandemic-rise-in-female-investors-women/
