Anyone familiar with the movie “The Shawshank Redemption” will remember the line, “Get busy living or get busy dying.” It kept echoing in my head as I read the annual World Wealth Report released by Capgemini and RBC Wealth Management and thought about our digital world. This report has long been considered an industry benchmark for tracking high-net worth individuals (HNWIs), their wealth, and the global and economic conditions that drive change in the Wealth Management Industry, but this report in particular should serve as a major wake up call for advisors and their firms that the “big” money has gone digital.
According to the survey, over one-half of respondents claim that all or most wealth management is digital and nearly two-thirds of clients with at least $1 Million or more in investable assets expect to manage some of their wealth digitally in the next five years. The fast-paced advances in technology have affected all levels of investors and consumers and their behavior when it comes to the purchase of products and services and the need for information. We have become conditioned to expect access to services and information on a 24/7 cycle– and financial resources are not immune to this expectation. In addition, the high rate of acceptance of digital channels by HNWIs, illustrated in the report, shatters a couple of long-held beliefs about the use of digital services in wealth management — namely that they are not being used.
As a result, advisor and firms that have yet to adopt a digital or social strategy are at risk of falling behind, not being part of the conversation, and at worst, losing clients in the process. According to the report, two-thirds of HNWIs would consider leaving their wealth management firm if an integrated and consistent client experience across all channels was not provided. To avoid the risk of losing both assets and potentially their best talent, firms need to adopt a transformative mindset that embraces the use of technology to interact with clients and improve the digital experience. Although nothing will replace the personal one-to-one relationship that clients have with their advisor, digital connectivity for access to information and content will continue to grow as tools for distribution improve.
Although social continues to be a risk and challenge for many firms, the greater risk is doing nothing and being left behind as the industry evolves. Social works, and studies in the U.S. have shown that 49% of wealth managers have acquired new clients through social media, of those, 29% brought in $1 million or more in financial assets.
Without a digital strategy, it will be very challenging for firms to attract new talent to support the growing wealth needs of investors under 40 who are leading the way in the use of emerging mobile applications, video, and social channels. Among the under-40 HNWIs, 40% cite social media as important for accessing information, 36% for engaging with wealth managers and firms, and 34% for executing transactions.
With the high volume of wealth transfer expected in the next two decades, this is too large of an opportunity for any advisor or firm to ignore. So, get busy living digitally, or get busy dying.
Read the entire Annual Wealth Report at https://www.worldwealthreport.com/
Learn more from Hearsay Social at SMAC New York, FTF’s annual social media and compliance conference on September 18th. Hearsay Social will be presenting a Keynote Address on The Next Digital Frontier for Financial Services: Amplifying Brand and Growing Business on Social.