Using mobile to connect with the Next Gen of clients before your competitors do.
According to a UK survey by Russell Investments, for one in 10 wealth advisers the majority of their client base is over 70 years old and for nearly 50% of advisers, between 20 and 50% of their client base is over 70 years old. Such figures will be familiar to wealth management professionals both sides of the Atlantic, as the debate over how well the wealth management industry is preparing for the implications of a significant transfer of wealth and assets from the baby boomer generation to generation X and Y has been gathering pace over the last two or three years.
Yet, despite the growing awareness of this intergenerational transfer, figures issued by Compeer Ltd in the UK last week at its annual Clients’ View conference in London indicate that a relatively small proportion of younger clients have received any sort of approach from the wealth manager used by their parents. Coupling this finding with Compeer’s figures on client loyalty, it is clear that if wealth managers do not scoop up the next generation early, it may be extremely difficult to convert them later on.
Such inertia is no doubt something that the mobile-only challenger banks are bargaining on (see most recent news). It has long been the received wisdom amongst retail/high street banks that signing up student accounts was crucial because it was so unusual for customers to move their account later on. That inertia is still a key part of the banking landscape even though most of the physical barriers to moving a bank account have been removed.
Reaching out to the next generation is something that wealth managers have clearly struggled to do effectively. The next generation is looking at an industry that doesn’t necessarily reflect its demographic make-up, concerns or tastes, and which doesn’t communicate necessarily in the same ways that it does. Few people under 50 can remember a time when there wasn’t a computer on their desk, few people under 30 can conceive of a world that doesn’t revolve around their smartphone. They value speed and 24/7 access more highly than previous generations, and face-to-face doesn’t need to mean physical proximity.
Starting a conversation now – but in the right ways and through the right mediums – will be crucial to both delivering, and also to creating, product and service propositions that resonate with the next generation from generation X to millennials. Taking advantage of communications tools that can help firms really get to know the needs and wants of the next generation of clients is one of the key things that will, in our view, separate the winners from losers over the next five to 10 years. That means video and instant messaging/chat applications that clients and advisers can use quickly, intuitively, and on the move.