U.K. stock brokerage firms AJ Bell and Charles Stanley are eyeing young adults with pandemic savings as potential investors who have shown an eagerness to take a gamble on the markets, the Financial Times reported on Thursday (May 27). Both investment platforms are introducing new products so younger investors can easily take advantage of investment opportunities that could grow their pandemic savings over the long term.
“There’s almost been an arms race in the platform industry,” Andy Bell, chief executive of AJ Bell, told FT. “There is a whole swath of advisers who are just looking for a simplified proposition for their clients.”
One of the U.K.’s biggest digital investment platforms, Manchester-headquartered AJ Bell is getting ready to introduce a mobile product called Touch that aims to give financial advisers an edge when taking on young adults as clients.
London-based Charles Stanley is in the midst of initiating organizational changes that include developing features and products to attract younger investors, the news outlet reported.
The pandemic has produced new types of investors who are digitally savvy, heavily influenced by social media chatter and drawn to meme stocks and cryptocurrency. Investment firms are now rushing to engage investors with pandemic savings to put their money in long-term vehicles.
“We’re really trying to reawaken existing client relationships and also to tap into a slightly younger demographic, which is where the growth has come from,” John Porteous, managing director of central financial services at Charles Stanley, told FT.
New customers under age 35 and existing Charles Stanley clients could prefer a “light touch” approach to financial advice, something that the company is looking toward, Porteous said, per FT. The platform could also act as a springboard to other solutions offered by Charles Stanley, like tax and retirement advice and products.
AJ Bell is planning to look to its financial advisers to find the right clients for its new product, which offers an easy, mobile-enabled alternative to the current system. Bell told FT that the average client is 56 years old, and he anticipates that the new service will bring in investors 10 to 20 years younger.
New research from the U.K.’s Financial Conduct Authority (FCA) showed that younger investors are taking financial risks they don’t fully understand. It also showed that new younger investors are not afraid to put their money into riskier vehicles.