Gen Y prefer one-month investing
Millennials and Generation X investors are driving growth in RateSetter’s one-month peer-to-peer lending market, while older investors prefer the three and five-year lending markets.
The peer-to-peer lender’s data showed that the one-month market was the most popular with it millennial investors, 72 per cent of whom have invested in this market since the company launched in 2014.
The one-year market followed in popularity, with 40 per cent of its millennials investing in this market over the last three years.
RateSetter chief executive, Daniel Foggo, said: “Far from wasting money on avocado toast, these young investors are seizing the opportunity to make their money work hard”.
“For a variety of reasons, they may want ready access to their money, so the one-month market gives them a stable, attractive return of around four per cent per annum and easier access to cash if they need it.”
Nearly three quarters (71 per cent) of Gen X investors have used the one-month market, with 51 per cent utilising the three-year market. Retirees preferred the three-year market, with 61 per cent utilising it, while 57 per cent used the one-month market.
The average amount invested in the one-month market has grown from an average investment of $3,777 two years ago to $11,483 today.
The research also found 56 per cent of the firm’s customers had moved money from a bank savings account to peer-to-peer lending, while 17 per cent had moved from domestic equities (shares), and 17 per cent from bank term deposits.
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
