Why wealth managers must adopt digital technology

Much of the western world has grown used to the idea that Baby Boomers hold the majority of a nation’s wealth. However, inevitably, change is in the offing: the next couple of decades will see large amounts of this wealth transferred to the millennial generation.

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The millennials – and why they matter

Millennials are generally defined as those individuals born between 1982 and 2002. According to a report for the UK’s Resolution Foundation’s Intergenerational Commission, much of their impending good fortune will come in the form of inheritances as grandparents and parents die. Some individuals can also expect lifetime bequests to be made in their favour.

With the Royal Bank of Canada (RBC) estimating that around $4 trillion will be transferred between the generations in the UK, Canada and the United States alone, wealth managers must ensure they are prepared to engage with the recipients. While many millennials may be unprepared for the realities of dealing with large inheritances or gifts, they often have very clear ideas on the sorts of technology they want to use to manage their funds. This is the first generation to have grown up with technology. For them, the traditional financial model may be something to be distrusted.

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Digital technology and the millennials

Astute wealth managers will recognise the demands of this generation-in-waiting, and will already be adapting their businesses to engage with the new client base. Technology expectations mean that intelligent software for IFAs and the like is a must. This ought to include interactive user interfaces and cashflow modelling to help clients see how funds might translate into lifestyle goals. Businesses such as https://www.intelliflo.com/ are ideally placed to advise financial businesses on the types of digital technology that can help attract and retain tech-savvy clients. They understand the importance of user satisfaction and the attraction, for some clients, of making software as much like a computer game as possible.

Millennials already have online service providers whose customer service epitomises what they are looking for in the wealth management sector. The automation and robe-advice that millennials are already used to is something that wealth managers can embrace. With the percentage-based fees charged by most wealth managers being too steep for many younger people, charging fixed fees for access to an automated advice service offers an ideal low-cost entry point to attract younger clients.

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