The Evolution of Wealth Management – Episode 43
The wealth management industry is shifting faster than ever. Demographics are changing, client expectations are rising, and the pace of change with technology is just unbelievable. The next few years will separate the firms that thrive from those that struggle to stay relevant. That’s why it is more important than ever that you are on the front edge of the next wave of wealth management.
- The rapid growth of the affluent market—especially ultra-high-net-worth investors. The mass affluent category of investors has been growing by around 25%. But if you look at the group with $1 million to $5 million in investable assets it’s growing by 97%. And the ultra-high net worth—those with 25 million or more—it’s 100%-plus growth.
With that in mind, The Preeminent Advisor Podcast recently spoke with Dennis Gallant, managing principal of strategic solutions at CEG Insights. Since the late 1980s, Dennis has been researching the financial services and financial advisory industries. He cites five trends that are driving the evolution of wealth management today.
- The growing importance of multi-generational planning. Across wealth tiers, investors are concerned about passing on their wealth and their financial values to younger generations. Advisors will need to proactively address multi-gen planning and have the often difficult discussions of what will happen when a family matriarch or patriarch has passed on. They’ll also need to engage with clients’ heirs by having the tools, technology, resources and teams in place to support them and retain them as clients after the wealth transfers.
- The ubiquity of technology. Technology has radically changed how we interact with people and companies—from how we order food to how we discuss health issues with our physicians. As tech tools permeate more of our life, it creates an expectation for that tech to show up everywhere—including wealth management. Clients increasingly judge advisors on the digital experience they provide, and advisors are increasingly relying on technology to boost client satisfaction and scale their businesses. For advisors, using tech well and communicating to clients and prospects the ways in which they’re using tech well will be vital.
- The need to expand offerings and add value in new ways. Investment management will remain important, of course, but it won’t be a differentiator that gets you noticed or gets you new business. Advisors will increasingly need to help clients deal with their entire household—retirement income planning, college savings for kids, health care solutions for aging parents, charitable and legacy planning, and so on. Delivering value in all of these areas is what’s going to differentiate you from the pack.
- The importance of teams. The need to expand offerings coupled with capacity constraints means building and maintaining a great team is paramount. Be they internal or external, teams bring expertise that you’ll need to deliver greater value—especially to high-net-worth clients. What’s more, those HNW clients are increasingly evaluating advisors on the strength of their teams. The upshot: Acquiring new ideal clients will require you to have a strong team in place.
SCHEDULE YOUR FREE PLAY TO WIN CONSULTATION NOW