Do you get me? A new tribe of bionic advisors learn the millennial ‘handshake’

Register now

Video may have killed the radio star, but who killed the video store?

Many blame Netflix for the death of Blockbuster, which used to be America’s favorite video rental shop. But the streaming service was not responsible for Blockbuster’s demise. The idea that Uber and Spotify destroyed the traditional taxi business and record industry is also a popular misconception.

There is no doubt that technology hastened the decline of these businesses, but their downfall was more of their own making. In hindsight, all of them failed to pay enough attention to the consumer experience and adapt accordingly. Some of you will probably remember Blockbuster for its wildly unpopular late fees, rather than its investments in online streaming. New Yorkers often favor the predictable pricing and convenience of ride-hailing apps over the city’s yellow taxicabs, while music fans can pay a monthly subscription that is less than the price of single CD for a portable collection of over 40 million songs.

The wealth management industry, which is ripe for technological disruption, is no exception to such warning signs. The industry would do well to listen to its own customers: investors. As a breed, investors are no less demanding and discerning than any other consumer. They are continually evaluating the service they receive from the people and organizations who manage their money, and they are fully aware they have a choice of advisors.

Investors’ preferences about who manages their money naturally varies according to age, net worth and life goals, but the majority want a wealth manager who, quite simply, “gets them.” The wealth management industry cannot offer all clients that eureka feeling – and there is no one-size-fits-all approach — but advisors can enhance the customer experience with a blend of astute communication, financial technology and new data.

Customer service in the wealth management industry used to be relatively straightforward. Advisors simply followed the money, focusing on the demographic segment with the most assets under management. But that approach won’t cut it anymore, not least because we are about to see a game-changing intergenerational transfer of wealth of roughly $30 trillion in the U.S. alone. It’s a transfer that is going to gradually turn millennials, who currently make up just 2% of high-net-worth clientele, into much bigger clients. This will gradually even them up with baby boomers, who make up 56% of the same cohort.

Advisors will need to learn how to serve these mercurial millennials. Our research shows that this generation values human interaction as much as any other generation, but they also expect everything to be delivered digitally. Advisors will have to experiment with a range of hybrid strategies – part human, part computer – to find the goldilocks recipe for communicating with this demographic.

That means marrying digital engagement – such as market updates, videos, industry insight and webinars, which are delivered via email, mobile messaging and social media – with a “physical” approach, such as phone calls and in-person meetings. There are additional complexities at the digital level: For example, millennials have a strong preference for email over SMS texts. And 38% of millennials use their smartphone as their primary advisor communications tool, compared to just 7% of boomers.

Aside from millennials, there are 180 million other U.S. investors out there who also seek a unique experience. In fact, the average investor has higher expectations than ever before and sees bespoke financial advice as a standard, rather than premium, service. A recent survey by Accenture showed that 84% of U.S. investors believe that if they share their data with advisors, they should receive personalized financial products and services.

If juggling the different generations and their multitude of preferences sounds daunting, advisors will be relieved to hear that they will find it relatively easy to meet investors’ demands in other areas. For example, all generations of investors prize experience over any other quality in a financial advisor, and our industry has experience galore.

There is further reason for optimism for customer-conscious advisors. They will find opportunities as well as pitfalls in the changing demographic landscape; they just need to learn how to best leverage/utilize them. Front, middle and back office functions are all deploying new financial technology such as artificial intelligence (AI), cloud computing, distributed ledger technology (DLT) and robotic process automation (RPA) which continually gather and analyze data in ways that enable advisors to better understand their customers.

For example, the implementation of AI to automate and accelerate the underlying processes of every stage of the client journey — discovering, prospecting, onboarding, servicing and retaining – can furnish wealth managers with mountains of data. This allows them to offer their customers more value-added services, which in turn brings in even more data. These newly bionic advisors can continuously analyze the results and fine-tune their messaging, which sets in motion virtuous cycles that measure, optimize and repeat the customer experience.

Every communication becomes an opportunity to create a value-added experience for the customer. Every communication should feel like a person is extending their hand virtually for a handshake.

There is no longer any such thing as an ordinary compliance mailing. The statement has evolved from a monthly paper document or text-heavy email notification, to what is now a highly-interactive, personalized website experience that is launched from an SMS or email. A virtual handshake with a “smile” that says, “I get you”.

The statement is no longer a static document; the numbers on the page come alive and encourage interaction, and there are dynamic charts that display scenario planning and progress against goals. The customer cannot see it, but they should feel it as this engaging experience is fueled by an avalanche of data and powerful analytics that are staggered across the advisor’s front, middle and back offices.

Such experiences allow the customer to utter the words our new tribe of bionic advisors long to hear: "they get me."

After all, no one wants to become the next Blockbuster.

For reprint and licensing requests for this article, click here.
Client relations Client communications Digital marketing Broadridge