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5 Things Wealth Managers Must Do to Thrive in the Digital Age: Insights from the 2015 World Wealth Report

The rise of new technologies, as well as the evolving needs and expectations of high net worth individuals (HNWIs) – especially those under the age of 45 – has given much for wealth managers to ponder and, more importantly, act upon over the next several decades. According to this year’s World Wealth Report released by Capgemini and RBC Wealth Management, wealth managers must adapt to meet the challenges of an evolving landscape or risk lower client satisfaction levels.
New digital entrants such as “robo-advisors” and direct channel platforms will impact the wealth manager’s role in the coming years. The report highlights the need for delivering a differentiated value proposition, and offers things wealth managers must do to stay ahead. And while some forward-thinking financial services firm executives realize the importance automated services will play in asset management, there are some wealth managers who are skeptical. The below figure highlights select quotes from wealth managers and firms regarding automated advisory services:
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Given that two-thirds of HNWIs are likely to leave firms that do not allow them to transact digitally, as last year’s World Wealth Report pointed out, it is critical for wealth managers to embrace digital technology. This will require them to adapt their models and reevaluate their value proposition, including addressing the needs of a considerable number of new clients that hail from the millennial generation.
Below are five ways wealth managers can meet the needs and concerns of today’s digitally-enabled clients:
1) Deliver differentiated value to address the needs of a diverse client base
Wealth managers must understand how to best engage with complete households – from children and spouses to parents and grandparents – and they must do so by effectively using technology to stand out from the crowd. According to the report, providing a differentiated value proposition, including the “adoption of next-generation tools, such as social networks and digital aids, to facilitate communication” will be important.
2) Engage clients and prospects across multiple channels
The report highlights how traditional modes of communication between HNWIs and firms have evolved from face-to-face interactions to omnichannel experiences. We’ve spoken on the need for a consistent, personalized multi-channel presence before and believe seamless, consistent customer experiences that drive personalized communications across channels, such as digital, is imperative in a world of automated consumerism.
3) Understand the needs and approaches of younger HNWIs
Wealth managers must get serious about addressing the needs of millennials, which represent a large group of HNWIs under the age of 40 who will significantly drive demand in the digital age (view video below). In the U.S. alone, an estimated $59 trillion is expected to change hands from wealthy baby boomers to heirs, and nearly 70 percent of HNWIs under the age of 45 will conduct most or all of their wealth management functions through digital channels. This will require a strong digital presence to attract and retain younger HNWIs.
4) Invest in technology-enabled investment services from third-party firms to support efficient and cost effective services
In addressing client needs, wealth managers can outsource competencies and efficiencies to third-parties that are “highly complementary” to existing business models, while wealth managers continue to focus on relationship and trust building.
Hearsay Social is named in the report as one such company that wealth managers can leverage:
“One example of a third-party firm is Hearsay Social, based in Silicon Valley. Its Predictive Social Suite technology enables wealth managers to customize content and engage clients, particularly younger clients below 35 years of age, through its social media dashboard and mobile-first websites.  This can further help wealth managers negate the threat of disruptive players in the industry.”
5) Embrace digital technologies to enhance the client-wealth manager relationship
According to the report, successful wealth managers will leverage social, mobile, and digital technologies to enhance overall service delivery and client experiences for a variety of functions, including prospecting, risk management, and wealth planning. And at the end of the day, as  George Lewis, group head at RBC Wealth Management & RBC Insurance, points out:
“The most successful firms will be the ones that reimagine the value they bring to their clients to be more competitive. As firms navigate the changing market dynamics, it’s important that they keep an open dialogue with wealth managers, while developing the tools, guidance and resources to support their success.”
The World Wealth Report from Capgemini is the industry-leading benchmark for tracking HNWIs, their wealth, and the global and economic conditions that drive change in the wealth management industry. View the infographic and download the full report from their interactive website.
Below is a video highlighting the importance of engaging with younger HNWIs.

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