One of the big questions facing the wealth management sector is how do they attract millennials – their next generation of clients?
As we all continue to adopt technology into all aspects of our lives ‘data’ is continuing to play a huge role. Yuval Noah Harari focussed on this exact topic recently in the Financial Times. He argues that as big data continues to take over our lives it will increasingly assist us in our decision making, even when we may not fully realise it. This is going to be most prevalent for millennials, a generation that has spent their entire adult life in a digital world. They are not only tech savvy but also more data driven than their parents.
As millennials reach an age where savings and investment becomes a necessary importance the wealth management sector needs to consider how best to attract them, and having done so, to assist them with their decision making. The key to this will undoubtedly be via technology platforms that allow this next generation of investors to fully transact online using from multiple devices. These platforms will also need to recognise the role of data, and the move to the age of ‘dataism’. Millennials like simplified methodology using technology and decision making processes that are supported by data.
London based start-up Moneyapp recently released their new app which aims to assist the millennial generation to start investing by rounding up each card payment to the nearest pound and submitting these micro contributions into a fund. Users then select their preferred level of risk and funds are managed accordingly. Retail banks have adopted similar functions moving funds from current accounts into saving accounts. Again the story here is that of technology assisting, with data being provided to back up the reason to make the decision in due course.
RoboAdvice and Target Date Funds are other solutions that fit the ‘dataism’ view; investors are seeking simplified and intuitive advice, at lost cost and transacted online.
Wealth Managers need to consider their current business models and how best to bring themselves into the digital age. As with any industry some firms ‘get this’ and are producing innovative approaches to the market. Other firms seem wedded to an old fashioned view that advice must be face to face. The answer, as always, will lie somewhere between these two extremes but it remains highly likely that to acquire a next generation client wealth management firms will need some form of digital platform.
At CoInvestor we are developing a platform that will not only be used by existing investors looking at alternative assets but also the next generation of investors, wealth and fund managers. We are constantly working on introducing rich new features and data capture points to assist investors with their decision making, whilst also providing similar insights to the wealth managers and fund managers that use the platform.