Wealth and asset managers are feeling the pressure to meet the diverse needs and generational preferences of everyone from Gen Z to boomers. Gaps in generational habits are increasingly wide, and investment managers must contend with an extensive range of preferences, complex continuity planning and behaviors, in addition to new technologies and volatile markets. One factor affecting all generations is how we access information, people and goods. Personalized experiences permeate our every purchasing decision. There’s no reason to expect that financial services should operate any differently.
The looming Great Wealth Transfer, in which boomers are poised to leave their inheritances to Millennials, offers an opportunity for wealth and asset managers to capitalize on this multigenerational transference and minimize the risk of the next generation taking their newfound wealth to a competitor. The idea is to focus on more than simple investor retention—managers must also prepare for opportunities beyond current relationships. Now is the time to affirm your position as the future generation’s firm of choice.
Just 4% of millennials and Gen Z said they would leave all their assets with the same independent financial adviser (IFA).”
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Younger Generations Look to Switch Advisers for Inherited Wealth, FT Adviser
This new population of investors is excited at the prospect of investing as a means to achieve previously unattainable financial goals. Retaining investor relationships with this cohort will require managers to combine proven traditional methods with an updated model that keeps up with new demands.
Firms are often stuck using foundations of siloed operations, legacy technologies and expanding data sets to deliver a complex matrix of personalized opportunities. Wealth and asset managers face a growing expectation to deliver at scale to the mass affluent population as private markets open to offer the same opportunities in retail investment as institutional and UHNW investors.
Firms are using our unified AI-powered platform to reimagine work and deliver work and deliver results to investors—results built on intelligence, automation and orchestration. Our platform helps you manage work across your entire organization end-to-end with a best-practice operating model of continuous improvement, connecting your data, technologies, processes and people within our comprehensive partner ecosystem.
Organizations that have embraced digital transformation are seeing an increase in productivity (13.8%), assets under management (8.1%) and revenue (7.7%)."
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Wealth and asset management 4.0, ThoughtLab
Investor expectations have shifted over the years as new generations enter the space. Gen Zs are true digital natives and tend to seek cryptocurrency advice from online influencers. Millennials enjoy the flexibility of self-serve solutions but also prefer human interactions in many situations. Gen Xers are generally digitally savvy, and likely to either save for their children’s or grandchildren’s education and/or look to retire early. Risk-averse boomers are the least likely to switch financial advisors.
Millennials are more than twice as likely (73%) than boomers (29%) to switch between providers, to move assets between firms or to begin working with new wealth managers.”
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How Can Today’s Millennial Investor Drive Business Growth Tomorrow, EY
Despite these generalizations, each investor is unique. You need to understand each investor’s risk tolerance, how they conduct research, their expectations of financial advice and their communication preferences. Relying on age-based categories and generational assumptions is insufficient to mitigate risk.
Stereotypes and generalizations aside, investors today universally expect personalized advice tailored to their specific financial planning goals, values and strategy, in clear language through their communication channel of choice. To stay competitive, firms must develop and execute an intergenerational contingency strategy.
There are four simple steps to mitigating risk exposure and maximizing multigenerational opportunity. To build deeper relationships with investors and their successors through consistent, effective and personalized financial advice across various channels, integrate intelligent automation (IA) throughout the whole process to meet every unique need and build intragenerational trust.
Excel at omnichannel execution
After you’ve collected the pertinent data and determined which investment solutions to propose, you can share those personalized propositions at your investor’s desired frequency over their communication channel or channels of choice. With the correct technology and strategies in hand, you’re ready to launch your retention drive and protect the long-term health of your firm.
Personalize each touchpoint with intelligent automation
You can ensure your messages resonate with each investor’s unique preferences and needs by using IA to create a personalized, effective and cohesive omnichannel communication strategy. Investors can receive information through their preferred mediums when firms seamlessly integrate tailored messaging across multiple channels.
By receiving synchronized and coherent information, automation contributes to a unified and seamless experience through messaging consistency regardless of preferred channels. Firms can keep investors informed about changes that may impact their investment by sending instant updates and alerts across their preferred channels.
Wealth management firms can provide immediate responses to investor queries by implementing IA-powered virtual assistants and chatbots. These automated tools free up human advisors to focus on more complex interactions by using technology to guide investors through basic transactions, address routine inquiries and offer general information.
In addition to missing out on potential AUM growth from new beneficiaries, firms that fail to execute a successful intergenerational contingency strategy risk losing relationships and clients’ wealth and family assets.
Wealth and Asset managers can protect assets, foster a greater level of trust with investors and build deeper relationships by leveraging IA technologies. IA can ensure the investor benefits from tailored experiences by enabling a firm to deliver those benefits with ease and at scale, securing the firm’s immediate and long-term success. These tailored experiences help all parties prepare for a better financial future.