Wealth management is not a sleepy market, but the core business model and operations have remained relatively stable while other industries have been immediately — and in some cases — viciously affected by empowered customers and the dizzying pace of digital.
It is already clear that younger customers are captivated by fintech and insurtech providers. They are willing to experiment and, in some cases, participate in digital disruption. They are also willing to leverage and trust relationships with commerce platforms to gain banking and insurance services. This dynamic is not blowing up the banking and insurance industries — yet. It is, however, pushing traditional banks and insurers to take new and bold steps in anticipating customer behaviors and moving more aggressively and imaginatively into digital.
And several factors are converging to make wealth management next in line to adapt to disruption: next because current customers (read: human beings) have a greater appetite to engage directly and digitally; and next because the next-generation investors were born digitally native, are more socially active and socially tribal, and have engagement expectations that likely outstrip and outpace current wealth management operations and experiences.
The first question is rhetorical: Do you wait for this dynamic to take shape before you act? (Hint: No!) It will take time to make hard strategic and operational choices; time (and wisdom) to build direct and productive relationships with customers while preserving and enhancing the powerful advisor model; and time to build and deliver on a digital road map that moves you more into a technology company. And lastly, it will take time to imagine, design, and deliver experiences that capture the hearts, minds, and investment dollars of new generations of investors that are already reshaping other markets.
The second question is, how do you plan for a market that simply does not act like or look like markets of old? Build the scenarios for 2020 and 2021 that allow you to war-game how changing customer behaviors and expectations will force change, how new entrants — startups, commerce platforms, and others — may disrupt the market, and how a new set of technologies (e.g., artificial intelligence, augmented and virtual reality) create strange but powerful opportunities.
Too many wait on a burning platform to act: a burning platform that will eat at the foundation of your business. Act now while there is a whiff of smoke in the air and time on the clock.