Digital Transformation Introduces Wealth Management to a New Generation


Robo-advising. The name itself conjures visions of technology gone haywire — the advice industry decimated by robots applying cold, hard algorithms to instantly serve the wealth needs of the mass affluent.  

Thankfully, the future of wealth management isn't automated, impersonal or robotic. It's personalized, based on an understanding of clients' life goals, and combines technology with service to help people achieve their dreams.

Robo-advising is certainly an innovative and disruptive force in the industry, but it's something that should be understood in the context of the larger trends shaping the industry and shaping society. Digital transformation is reimagining everything, especially people's expectations. While only one element of the equation, robo-advice solutions offer superior personalized experiences that introduce wealth management to an entirely new generation of consumers.

Robo-advising is certainly an innovative and disruptive force in the industry, but it's something that should be understood in the context of the larger trends shaping the industry and shaping society.

Recent research underscores the opportunity. According to Expectations & Experiences, a quarterly consumer trends survey sponsored by Fiserv, people unsurprisingly said they were challenged by managing their finances and sticking to long-term plans. Millennials in particular reported spending more time on monthly finances than any other generation.

When asked what would be most helpful for managing their finances, the top response for early millennials (ages 18 to 24) was in-person advice from a financial professional. Over 43 percent of these digital natives want advice – and they're not getting it today. Only 24 percent of consumers reported using any kind of professional tool or advice, and for millennials it's even lower.

What does this mean for the industry? The future looks bright. Every generation, especially millennials, wants help and advice and they'll gravitate toward financial organizations that offer low-barrier digital entry points and deliver according to their expectations. This generation's needs will grow in parallel with their investable assets, and the firms that understand how to meet those needs over the long term stand to gain the most. This requires a unified approach that enables our clients to maintain a single platform for all managed account trading to facilitate ease of movement through the investor life cycle.

Robo-advice isn't an all-encompassing solution for the entire industry. Rather, it is an entry point into a larger platform built on consumer insight, enabling financial organizations to offer solutions that adapt to people's needs as they evolve. A unified approach to wealth management makes this possible.

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