There is Need To Democratize Capital Market Assets For Millennials In Nigeria - Abiola Adekoya


Sunday, September 15, 2020 / 11:00AM/Nifemi Taiyese for Proshare WebTV/ Header Image Credit: B2G Network

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There is need to make more exotic capital market assets accessible to the millennials through the democratization of certain assets noted, Ms. Abiola Adekoya, former CEO of Rand Merchant Bank as a guest on WebTV's "Millennial Investment Conversation Series" segment of the Market Opening Gong.


According to Adekoya, the capital market is accessible to millennials, but a lot more can be done to make it easy by opening outlets for them to get into the market.

Speaking on her transition from banking to stockbroking, Adekoya said it was done in a bid to be more impactful and give advice to investors on where to invest their money and advising them on what to buy and sell.


As an investment banker, she said that there are opportunities for millennials to get into the capital market through stocks and FGN Savings bonds.


She noted that the performance of the market in the last 2 to 3 years has made investor interest wane and discouraged millennials and Gen-Zers.


"There are now other investment opportunities available to millennials that make the conventional options less attractive which range from alternative assets such as Agri-funds and FX trading" she said.


Access to global and international markets have also become popular and refocused the interest of millennials away from the local financial market.


On her interactions with operators in the capital market, Adekoya said she has been an advocate for the business of educating millennials by getting more involved, instead of leaving it to other non-practitioners.


According to her "A lot has been done in terms of educating the wholesale market, that is, institutional investors and there is need to bring some of the knowledge that has been offered there to be more tailored to suit the millennials".


She noted that millennials tend to absorb information very differently; older people can understand the technical jargon, but millennials prefer simpler language and their meeting point is through social media.


The investment experts from her perspective need to leverage social media platforms more often to engage with younger investors.


Through various off-air conversations with practitioners in the industry, Adekoya has been promoting the need to take the messages out of the office to younger individuals.


Speaking on product innovation, she said a lot has been done in certain areas, but it has not been communicated properly, "The Nigeria Stock Exchange has some products which they are already initiating and have launched and implemented. There is need to bring the Securities lending product from institutional investors to retail investors" Adekoya said.


In her view, another product that is not being adequately communicated is the Gold Exchange Traded Funds (ETF).


In the last couple of months, she stated that gold was really one of the best performing asset classes, particularly during the recent market downturn as a result of the pandemic outbreak of COVID-19. According to her it was not marketed a lot to investors so they could not take advantage.


She believed a lot more can be done in the introduction of products, that will make millennials more excited, as they take risks by investing in non-popular asset classes.

Adekoya mentioned that they engage in properties, FX trading, and slightly higher risk investments.


She called on the capital market community to do more in terms of bringing this demography on board to the key Exchanges.


Giving her perspective as a dealing member, on what more can be done by capital market operators (CMOs) to woo millennials into the market, she highlighted the following issues:

  • It is essential for dealing members to continuously educate the people about what is being done.
  • The dealing members need to promote access to the products they have available.
  • Dealing members should be more visible to millennials.
  • Dealing members need to leverage technology to drive business and also serve as a strong tool to penetrate into the millennials, if utilized properly could spur growth within a short period of time.


It is important for millennials looking to invest to follow a five-step process;

1.      Identifying their goals which informs the choice of asset, which could either be short, medium or long term.

2.     Identify which asset classes are available to invest in by doing due diligence.

3.     Determine and define the level of risk appetite.

4.     Select the financial services providers that meet the product criteria

5.     Take action on Investing


The financial market expert believed that millennials now have a wealth of information that they can take advantage of and leverage on. She advises millennials to focus on saving to invest money in the moment which would grow exponentially in the future.


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