Contemporary wealth management models are still largely focussed on the older generation. However, wealth is steadily being passed down to the next generation of investors. In fact, we are already beginning to see Millennials moving up the wealth management ladder. This tech-immersed generation have completely different expectations when it comes to seeking financial advice. In particular, they look for online accessibility, practicality and ongoing communication.
Over the past decade, digitisation has reshaped much of the financial services industry, yet in the wealth management space, firms have remained largely on the sidelines. However, the transition towards digital is inevitable and will eventually transform the wealth management industry. Firms that choose to adapt and initiate plans for digitisation will put themselves at a huge advantage. Key advantages include (i) improving client experience and expectations, (ii) increasing productivity and (iii) staying relevant within the industry.
1. Improving client experience and expectations
As Millennials are familiar with easy account access in other financial areas, they assume the same will happen for managing their investment portfolios. Wealth managers need to meet the ever-growing demands of investors who are no stranger to a sophisticated digital experience. Integrating digital processes with existing techniques will provide clients with ongoing communication and easy access to their portfolios, and will contribute towards a much better client experience. Whilst face-to-face meetings with clients will remain important, if wealth managers can integrate this with digital innovation, this will help them to better understand and support their clients.
2. Increasing productivity
Changing business models to incorporate technology will also increase productivity by allowing companies to manage their time and resources more efficiently. The move towards digital processes will reduce time and operational costs by removing large amounts of the paperwork and will allow wealth managers to oversee and have control over what is happening on the ground. This means wealth managers can be quickly notified of any problems and take steps to solve any problems before they escalate. Wealth managers that move more of their client communications online will also free up time to focus on higher value activities, such as strengthening existing client relationships and spending more time with those that require more one-on-one meetings.
3. Staying relevant within the industry
Whilst digital transformation won’t happen overnight, companies that don’t respond are at risk of not surviving in the medium to long term. Maintaining market share in the wealth management industry and staying ahead of competitors means being digitally prepared to engage with new clients. Wealth mangers cannot assume that their expertise, brand prestige and even the quality of their client relationships alone will protect them from this possibility.
By Millie Bampfylde, Marketing Executive at CoInvestor