Last month, we joined over 2,500 financial industry players at the Morningstar Investment Conference in Chicago. With over 50 sessions available for attendees, Morningstar’s research leaders and esteemed guest speakers hosted seminars spanning topics from fixed income to the future of the metaverse, and everything in between.

With so much uncertainty clouding markets, investors and advisors hungrily attended sessions, looking for answers about what comes next and how they can best prepare their portfolios. Below, we break down our top takeaways:

Investing is a game for all ages

In the keynote session, Morningstar CEO Kunal Kapoor shared his vision for the future of active investing. He asserted that advisors have a unique opportunity to focus on active personalization to better suit their clients’ needs. More and more investors have an increased appetite for bespoke financial planning curated to their unique risk profiles, and are intrigued by emerging alternative assets like NFTs and cryptocurrencies. 

One main driver pushing this trend? The average age of investors is shifting, with younger investors entering the playing field. Kapoor reported that the 25- to 34-year-old age group has become more active, tying for the top spot with 35- to 44-year-olds in share of visitors to the Morningstar website. In addition, there has been meaningful growth among the 18- to 24-year-old demographic, reflecting that younger investors are exerting their influence on the industry. Though these investors may not have much capital to allocate right now, advisors would be wise to consider that they’ll likely be the force powering practices in the near future.

Crypto remains the great unknown

There’s no longer a question about whether crypto is here for the long haul. It almost certainly is. However, much conference chatter around the headline-making asset was related to its innate volatility. After a knee-buckling decline of $600 billion in one week just prior to the conference, there was clear sentiment among presenters and attendees that the future of cryptocurrencies remains hazy. 

It will be crucial for investors and advisors alike to familiarize themselves with these assets as the linear path between traditional finance and decentralized finance shortens. Being mindful of regulatory developments in the crypto space will play an important role, as these digital currencies become a more accessible and practical part of everyday life.

The future relies on ESG

ESG (environmental, social and governance) investing has been pushed to the forefront of investors’ minds, prompting not only increased awareness about important issues like the ongoing climate crisis but also presenting unique opportunities for investment.

In a session about companies’ move to “net-zero” carbon emissions, Morningstar panelists Travis Miller and Alex Osborne-Saponja discussed the obstacles facing a low-carbon economy, including scalability and accessibility. If firms can overcome these hurdles, there may be an opportunity for high returns. Osborne-Saponja stated, “A net-zero economy in 2050 could be worth $70 trillion to $120 trillion — and that’s through investing in solutions that exist now, not solutions that exist in the future.”

As investors and advisors continue their discourse around ESG-consciousness, companies that want to remain part of the conversation will need to consider aligning their operations and goals to be compliant with ESG guidelines.

Adapting and evolving

When looking to the future of markets, uncertainty and volatility are among the few traits that investors and companies in the financial industry can actually anticipate. Paying attention to emerging trends will be key to success, along with remaining adaptive and agile amid an ever-evolving world.

Especially within the digital asset space, blockchain and Web3 are likely to increasingly integrate into everyday life moving forward. As intrigue about these assets and technologies grows, demand should rise accordingly. It would be wise for financial industry players to monitor this trend, potentially utilizing branded marketing campaigns to showcase how they are adapting and increasing their own value in the process. Please contact us if you’d like to learn more about how Gregory FCA can help!