The Top 10 Communication Trends In Wealth Management

It doesn't matter what industry you market or sell into, everyone is a consumer.  Whether dealing with a bank, or ordering from Amazon, people expect consistency in their communications and their customer experiences.  And there are variations in those expectations because each individual has a preference for how they receive communications. 

So given this evolution in customer experience expectations, how do you triage which communication needs require your immediate attention?

Below are 10 trends in wealth management that will guide you in where to focus your communication efforts.

1. The times they are a changing.  Gen Y is changing the business model.  More and more Gen Ys are choosing the independent advisor path.  As an affiliated advisor they have more control over their client focus and make more money.  While the “dial for dollars” stigma doesn’t exist in this model, support received from a firm is also limited.  The independent model emphasizes focus and segmentation.  Personal brand development is a must and strong relationships rule.
2. Advisors are requiring a more extensive onboarding program, education, and training.  With 85% of trainees quitting within four years, this is especially discouraging to firms who invest, on average, $250,000 per trainee.   The wire-houses have started arming their advisors with tools to become more “holistic” wealth managers; they’ve put in place a focus on teams and technology, giving their advisors more latitude to work with clients in a variety of different capacities, not simply investment management.   Advisors need extensive training in compliance, technology use, personal brand, and client relationship development.
3. There is an increasing demand for increased advisor productivity.  According to CEB, an advisor owns an average of 105 client relationships, and averages 10-15 high net worth clients.  50% of their time is spent meeting with clients.  With policies like KYC and an increase demand from the clients for more collaboration, advisors are challenged to provide the level of service required across their entire client base.  Business must be done in real-time and advisors must focus their face-to-face efforts on their higher net worth clients. Automating frequent, personalized, communications to the remaining client base is a necessity. For advisors to be productive they need a good CRM and MA solution to retain key information on the client and the client’s household and support the cross selling of investment products.  They need capabilities that are highly analytical in using customer data to draw sophisticated insight and predictions around profiling are targeting profitable positions.
4. Clients are demanding a more personal and collaborative relationship.  There is still an element of distrust in the banking and investment world. Clients want to understand their investments and be a part of the decision making relative to their money. The number of people seeking new advisors because they believe there current advisor is neglecting them has doubled in a year.  This extends to spouses as well.  About 70% of widows change financial advisors within a year of their husband's death.  Clients don’t want to wonder “who’s going to take care of my money?” Its imperative an advisor develops, and documents, a strong relationship with the family.
5. Banks are betting on Wealth Management for growth.  Wealth management divisions have a high profit potential and are considered low risk.  Wealth management clients are perceived as stable.
6. There is increased compliancy and regulation.  There is an extensive application process with a high risk of error.  The high volume and cost of regulatory change will be the "single largest challenge" facing firms in the years ahead. It's going to be increasingly challenging for firms to offer all services, to all clients, in all markets.  Firms can strengthen their business continuity and disaster recovery plans by considering the observations in the Risk Alert and implementing or strengthening practices as appropriate.
7. Firms and advisors must be easy to do business with.  Firms must provide real-time visibility to both internal and external teams. This is necessary because many wealth management firms struggle with pulling data from various systems, product areas, and operations (like SFDC, SalesLogics, Seibel, Real Time Decisions, and Data Warehouses) to provide timely information that is crucial for managing the relationship with the client.  Wealth managers need to customize offering and deliver value within efficient service models that balance costly resources against a high quality customer experience.
8. Advisor recruitment is a challenge.  The average financial advisor is older than 50, yet most do not have a succession plan in place.  There are 10,000 Boomers turning 65 every day.  Additionally, only a small percentage of financial advisors are younger than 30.  The number of financial advisors has been decreasing in recent years, and it is critical to make this field a compelling career choice for young people. It is also critical for mature advisors to realize the different dynamics of the next generation of advisors, who have a planning orientation as opposed to the product and sales orientation many current advisors started with.  Also, wealth management historically has a high attrition rate.  80% of advisors don’t make it 5 years in the business
9. Enabling internal resources is imperative.  Firms must provide sales enablement tools to the advisor community.  They own the relationships.  Firms must give advisors the tools they need to educate themselves and their clients.  Firms and advisors need to recognize the potential in social media.  Many view LinkedIn as the new CRM.  There is a huge opportunity to develop a greater understanding of a client base and develop a strong referral business.  Leverage sales tools and social media.
10. Communication challenges are only going to increase.  Firms will implement sophisticated tools and analytics that gather and analyze data in real-time from several sources for prospecting and client servicing.  These tools will deliver speed, simplicity, style, and design.  Advisor portals are becoming a must-have tool.  Advisor Portals provide the opportunity to talk to people more directly, openly and frequently than ever before. The potential yield from that in terms of ongoing loyalty and asset growth is most definitely a prize worth winning.

What trends are you seeing in this space?