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How Wealth Managers Can Adapt to a Shifting Demographic

The wealth management industry is currently undergoing a period of significant transition, as the share of global wealth held by baby boomers steadily shifts towards Gen X and millennials, a much more tech-savvy body of investors than their predecessors.

This shifting demographic presents both a challenge and an opportunity for wealth management firms. Those slow to adapt to the expectations and preferences of this younger generation of investors run the risk of losing market share, whereas those able to service their needs – particularly through harnessing technology to their advantage - will no doubt continue to prosper well into the future.

Gen X and millennials are not like their predecessors

Today’s ‘digital natives’ think and act differently to previous generations when it comes to investing. Typically, they are more sceptical of authority and less likely to take discretionary services, preferring instead to conduct their own research and follow the wisdom of their peers, particularly through online social and digital channels.

They generally like to keep control of their finances and to take a more active, ‘self-serve’ role in how their wealth is managed. And being accustomed to all things digital, they expect to be able to immediately access information relating to their portfolios, their assets and the market in the same way they do with all their online interactions: anytime, anywhere, and on any device.

Compared with their older counterparts, they are also more open to investing in alternative asset classes, digital assets such as cryptocurrencies, and ESG (environmental, social and governance) products, often wanting to make a positive difference in the world through their investments.

Implications for wealth managers

This changing demographic has serious implications for wealth management firms, many of whom are woefully unprepared for the generational shift that is now under way. With that in mind, here are some questions that wealth managers could ask of themselves to determine whether they are ahead of the curve or behind it:

• How do our clients share their specific investment goals and preferences with us? And are we able to tailor our products and services to match their unique individual requirements?
• Are we able to provide our clients with multiple advisory models from various sources, including social media as well as other advisors and ‘experts’?
• What kind of digital end user experience do we offer? Is our UI available real-time, across multiple devices? How simple and intuitive is it, and does it facilitate a ‘self-serve’ model?
• Do we offer access to a wide range of assets, including ESG, alternative and digital assets, along with supporting market data, news and comprehensive analytics?

Wealth managers who can answer these questions positively will undoubtedly be far more attractive to the younger generation of investors than those who can’t.

How Infront helps

Infront Wealth Management Solutions, built with the future in mind, provide everything needed to service the new generation of investors.

Our wealth management customers rely on us because we have built a smarter alternative to financial market data technology. We offer a powerful and future-proof combination of global market data, electronic trading, news and analytics, along with portfolio management and advisory functionality in a single integrated solution. All built to be modular and scalable to suit each client’s needs.

Wealth managers and their clients can use Infront’s solutions to manage investment decisions, reduce costs, adapt to fast-changing market requirements and work more efficiently with ever-increasing amounts of information – quickly, easily and flexibly.

As the demographic of wealth changes, by working with Infront as their technology partner, wealth management firms can be fully prepared to take advantage of the shift.