In an age where state of the art technology is readily consumed by the mass affluent, wealth management providers need to form sticky digital relationships with their clients to ensure those clients money can be transferred to the younger generations as quickly and seamlessly as possible, says Capco.
In its latest thought leadership piece titled Digital services in wealth management, Capco said many of these individuals will be part of the wealth transfer time bomb. It will break as the current population of entrepreneurs and other prosperous individuals transfer wealth to the generations behind them.
“Even the longest, stickiest relationships with trusted family wealth managers will not escape appraisal and potential termination.”
Capco identifies offering the X factor to generation Y as the real wealth management challenge. The core challenge is to devise and deliver a digital relationship via online and mobile platforms that exceeds the expectations of the time poor, demand rich, 25 hours a day customer, it says.
Capco cites top line growth in a regulatory environment that is constantly driving up compliance and risk costs as a key challenge for wealth management providers, including family offices, private banks, IFAs, retail online trading, retail banking, private client stock brokers and insurance providers.
The idea of relationship and its core values has to be re-interpreted in the digital environment. Generation X and Y customers will freely give personal data in an impersonal, online environment. They have less expectation of regular, face-to-face meetings. But they do demand accuracy and immediacy.
Now, in the light of this major shift, banks need to re-examine client segmentation. They must engineer clear service offering differentiation, both within each customer segment and according to key indicators such as lifecycle, geography and source of wealth.
The key objective for a wealth manager in the digital age is to become the indispensable heart of the clients financial life. This means a real relationship making a profound shift from transacting to truly interacting with clients through the digital channel.
In summary, Capco says the digital wealth and investment management service offering needs to make two sets of crucial connections: to customers needs; and to an engaging client experience, delivered in a compelling package which joins up meaningfully with the service providers offline offering.
Configuring and implementing a high quality, compelling and digital relationship presents a number of core challenges, says Capco. These include: clarity and ease of process, whereby information must be clear and shared; no more confusing bank statements and overly-involved account opening procedures; coherent; real time transparency; and personal connectivity, whereby clients should be enabled to connect with their advisors; allow clients to connect with clients (under well-defined and controlled circumstances).
Capco notes that leading edge wealth management solutions provide clients with a mobile brokerage application for iPad, iPhone and BlackBerry devices. “They enable clients to view their portfolios, transfer money, trade securities, access research reports, and personalize their own wealth management dashboards. Onscreen functionality is matched by alignment of the service portfolio to specific customer needs. Integrated investment management and banking products allow customers to access a broad range of services including money management, as well as more sophisticated financial planning and wealth management.”
(JDC)