By Winnie Palmer, EMEA Head of Marketing, Seismic
The number of wealthy individuals is steadily on the rise. What’s more, 63% of the global population is now under the age of 40. Amidst these demographic shifts, many people will likely be involved in a considerable transfer of wealth over the coming years.
The next two decades will see approximately $70 trillion transferred between generations in North America alone. The global figure will be significantly higher, as Europe and Asia are both expected to be dealing with equally staggering amounts. It’s clear that the scale of the great wealth transfer will be enormous, totalling the market capitalisation of Amazon 17 times over or the entire annual Chinese economy.
However, the transfer of wealth isn’t a simple process. Although this trend will present major opportunities for the wealth management industry, dealing with a younger generation of customers from various different countries and cultures will pose certain challenges. The vast majority of ultra-high-net-worth (UHNW) individuals and families struggle with effectively transferring wealth and responsibilities. Therefore, wealth advisors’ ability to reach beyond the family figurehead, to develop a relationship and understanding with other family members, will be a vital competitive advantage.
But the question is, how can financial services (FS) firms start preparing today to take advantage of the looming great wealth transfer?
Preparing wealth managers for the next generation of customers
Over the coming years, enabling wealth management teams to deliver engaging, meaningful, and differentiated client experiences – regardless of their geographies, languages spoken, level of experience, or job function – will be key to success. Only then will FS firms be able to build trust with the younger generation of customers in an increasingly competitive digital landscape.
Central to this strategy will be implementing technologies that create an end-to-end enablement ecosystem – connecting and leveraging data, systems, and people to deliver entirely differentiated client experiences. The fact is more people are engaging with advisors through digital experiences. Without the right tools to enable and empower wealth managers, these digital interactions can easily seem insincere and soulless.
Ultimately, success in wealth management is all about selling trust. An advisor’s role is to inform clients about market developments and how the industry is likely to evolve in the future. It’s essential that customers can trust financial advisors to manage their wealth and families, more specifically the transfer of wealth to their children. Indeed, the two main requirements of the modern FS client are to make sure they trust those managing their wealth, and that those advisors have the knowledge and expertise to handle it effectively.
They need and expect to have access to a future-proofed wealth management solution, not an outdated model. That’s why experience and behaviour are so important for advisors and where enablement comes into play.
The age of the digital nomad
We know that the modern generation of wealth management clients are much more accustomed to digital experiences. They are mobile and socially savvy, requiring financial advisors to be capable of interacting across digital platforms while still accommodating in-person meetings as required. What’s more, this demographic is more likely to use self-service whenever possible. Digital platforms and mobile phones are channels through which they learn about the topics they’re interested in.
For this reason, FS firms are looking towards social media to prospect for new customers. However, while younger clients may be interested in such an offer, they are less likely to welcome direct communications such as a phone call. Their preference is to educate themselves with the content that’s available to them and conduct their own independent research to decide whether an offering is right for them, in their own time.
There’s also a demand from this new generation for experiences that are tailored to them whenever they interact with an FS firm. The days of generic 30-page documents are over. To be effective, financial advisors must expertly communicate relevant information that matches a prospect’s specific needs and circumstances.
Enable, engage, improve
Enablement technology is empowering FS firms to deliver the level of personalised experiences that are now expected. Deploying enablement solutions is the most effective way for firms to earn and maintain trust at scale.
First, firms must enable financial advisors and relationship managers to be more productive quicker. Enablement solutions that provide training and scenario-specific playbooks will help them chart a course through complex selling situations. FS firms can also leverage data-rich content automation to deliver maximum speed and efficiency, freeing up advisors to focus on more important client services.
The next step is engagement. Engaging clients throughout the buying cycle and across multiple digital channels in a way that stands out from the competition and is completely tailored to the prospect’s individual needs is vital. Finally, firms must arm their personnel with technology that collects valuable real-time data insights, in turn empowering financial advisors to continuously improve, adapt, and win.
This is an ongoing process that the most successful, forward-thinking firms are already implementing. Enablement strategies underpinned by technologies are dramatically enhancing efficiency and allowing for more time with clients in order to better service their needs, all while maintaining full compliance.
Technology is the way to win. Either start small and grow or go big and take it to the next level. Whatever the approach, it’s critical that FS firms understand strategic priorities within the limitations of their business.
