What’s so good about disruption in the wealth management industry?
A research report by Deloitte titled “10 Disruptive Trends in Wealth Management” highlights the key influences affecting this sector, four of which relate to emerging technology and regulatory change. The paper suggests that the wealth management industry is behind the curve in terms of leveraging technology, big data and analytics especially and goes so far as to suggest that investment advice has become largely commoditized as advisors can no longer prove their services are differentiated based on their investing acumen.
And while some in the industry may be discouraged by these trends, those who focus on the corollary of each one will recognize the tremendous opportunity. Take the aging demographic of the population. 43% of financial advisors are over the age of 55 and 1/3 of the work force will retire in the next 10 years. Baby boomers will be transferring their wealth to children and so assets will likely change both owners and advisors (research shows wealth transferred from one generation to the next results in 90% of heirs changing their advisors).
Clearly, wealth management firms who can hire and retain younger, tech-savvy financial advisors while offering a platform that allows them to service their new clients better than their peers, will do well.
Tags: Financial Services