The ‘Break Point’ for UK wealth managers
How the re-wired investor is bringing a new vision of what they expect from wealth management.
RVP Northern Europe at Backbase
Break Point; Netflix’s latest hit show, follows the next generation of tennis players emerging from the shadows of Nadal, Federer and Djokovic, as the changing of the guard begins. 18 year old Alcaraz’s success at the 2022 US Open highlights the beginning of this transition and the shifting expectations of who will win and lose in the future.
Similar parallels are being drawn within the wealth management industry. The grip of its legacy players is also waning, as the next generation takes over. The ‘great wealth transfer’ is in full flow as the ‘re-wired investor’ brings a new vision of what they expect from wealth management, creating big challenges for the industry as we know it.
The changing of the guard
This new generation are digital natives, growing up alongside Uber and Amazon, with the ability to get anywhere, or order anything at the click of the button. Now, they expect the same when it comes to controlling their wealth. The historical wealth management model of in-person meetings once or twice a year is no longer enough when clients expect a full picture whenever and wherever they want it. They are demanding a wealth management firm that adapts to their lifestyle, not the other way round.
Increased globalisation, alongside the rise of hybrid working post pandemic, has meant that the younger generation are less tied to one place than their predecessors. Therefore, regardless of where their wealth manager is based, customers expect a digital presence that can provide a deep dive into the details of their finances and portfolios. They want a digital offering that can give them valuable online advice to make investment decisions at the tap of an app, stay on top of trends and make the most of opportunities.
Stuck on the baseline
Wealth managers historically have not had the technology behind them to support this shifting attitude towards personal finance. Reliance on email, direct mail and even excel means shared files are not updated or shared in real-time and a true market view is not available to clients. Capgemini’s Global High Net Worth Individuals Insights Survey from 2022, indicated that the main areas of dissatisfaction all fell within the digital offering of their wealth management firm, rather than investment performance. This is particularly worrying given the younger generation are unlikely to sit around if something isn’t right – McKinsey discovered that 40% of HNWIs are searching for a new wealth manager who better align with their needs.
Turning the game on its head
There is a simple solution for wealth managers. If clients have changed their expectations of the service they expect, then wealth managers need to reflect this in their own offering and avoid settling for the manual processes that have characterised the wealth management industry for so long.
Instead, the focus must turn to digital convenience and providing a personal and tailored experience across any channel that clients are interacting with. In an industry rooted in relationships, a hybrid approach will far outweigh an exclusively digital method, however, the right technology, tools, and ready-to-go apps, will empower client advisors to assist the next generation of investors in the way that they want to be supported.
If wealth managers can successfully harness technology to better reflect the generational shift of the world in which we live, they can create a hybrid solution that gives value to their customers in the way they want it. Ultimately, it will be the difference between gaining advantage or losing break point.
How can Backbase help
Assist the next generation of investors. With Backbase, you can deliver superior experiences and exceptional service on any channel. You'll get ahead of client expectations and become the go-to provider for all their financial needs. The result? A high tech, high touch banking experience that truly matches your brand.