January 5, 2018
Beacon Wealth Management Megatrends
One of the eight megatrends Beacon has identified as having the greatest impact on Wealth Management is the shift to an Information-On-Demand model; really, the instant fulfillment of information and transaction requests. Led by millennials, investor behaviors are changing, pushing all financial institutions to provide the same immediacy, transparency, simplicity and transaction self-servicing as offered by the strongest consumer/social media apps.
A New Value Proposition
While many firms are just beginning to shape their digital advisory experience, the table stakes for capturing millennials in financial services is rapidly growing. Chat-bots, mobile-only applications, social media outreach, and TouchID capabilities are baseline expectations derived from the Facebook/Amazon experience.
And these features need to work well, not just be bolted onto the package. One institution’s recent survey of mobile app users indicates a clumsy check deposit interface was a primary factor in account attrition.
Every customer interaction needs to provide value. Efficiency (speed & simplicity), quality service and data driven personalization are the value drivers. Simply adapting your current “brochure” website to be visually pleasing as a mobile app is not a viable strategy in this new environment.
Although millennial is the buzzword in the information on demand shift, the reality is the trend encompasses all of your customers. We need to recognize that this is not a binary model where we abandon today’s knee-to-knee advice model for some cloud based – advisor in the sky. And this value proposition needs to permeate all of your customer interactions
If you are contemplating a robo-advice alternative, you need to ensure it supports the same value drivers. As should your advisor and firm recruitment platforms if you expect to retain and recruit the new generation of investment advisors.
The oldest baby boomers are turning 70.5 this year resulting in the automatic initiation of required minimum distributions. It is the unofficial start of the inter-generational (Gen X and millennial) wealth transfer of $30 trillion in assets that will continue for the next 25-30 years. There are decades to go of supporting several sets of generational preferences within a single, integrated service strategy.
Data show that older and wealthier investors were amongst the earliest adopters of client portal technology, and while more comfortable with relying on taking advice, they like the ease that technology provides to stay in contact with their advisors and have information instantly available. Likewise, although millennials may seek a more participatory role in their investment decisions, they value and desire education and “problem-solving” advice.
Obviously, not all of information on demand features will be utilized by every customer. But it is likely that most “millennial” features will be adopted by X-ers and Boomers, just ast Netflix, Facebook, Amazon and Uber have already been embraced by these older groups.
Need for a Broad Perspective
Information on demand requirements need to be seamlessly woven with existing service models to create data-driven personalization and timely, reliable and accurate transaction fulfillment. The value of your brand will depend on this holistic approach, whether the investor is sitting knee-to-knee, on the phone or using a client portal.
New features will have to deliver on their promise:
- Chat-bots need to be relevant
- Investor inquiries need to result in actionable responses
- Online resources need to be made easily available.
requiring full integration with your existing infrastructure.
The data to personalize interactions needs to be readily available from applications utilized today in any personalized, knee-to-knee engagement:
- Financial Planning
- Risk Management
- Data Aggregation
- Client Portals
Existing investments need to be leveraged to contain costs, ensure a consistent customer experience and maintain your customer information integrity. And let’s not forget about anticipating and meeting greater challenges to cybersecurity and sales supervision.
Expanding beyond their corporate assets, thought-leading wealth management firms are already exploiting “universal” technologies like Facebook messenger as a channel for addressing simple customer requests.
What this hybrid platform looks like and how it will be cost-justified is one of the topics attendees at Beacon’s upcoming Banking TechRetreat will be discussing. We will be publishing a key takeaway summary after the conference.