Designing Services for the Future of Wealth Management
Wealth management is a banking niche that has been under fire lately. We’ve gone from the Financial Crisis of 2008 to the European Crisis of 2011, both of which have been huge, transformative events that have wreaked havoc on the portfolios of many High Net Worth Individuals (HNWIs). But that’s not the only changes we’re seeing in this market – we’re also witnessing what is probably going to amount to the second largest transference of wealth between two generations in the history of the world (the largest occurred following the black plague in the 14th century). This has a large impact not only on today’s HNWIs but also tomorrow’s – and these are the future HNWIs that wealth management will have to attract and retain.
Combine these global and demographic changes with the pace of technological change. Over the last decade we’ve witnessed the rise of mobile computing, true wireless connectivity, and perhaps most importantly, human interaction with computing forms and data itself. In 2010, Apple released the iPad, and much like the iPhone a few years before it, its introduction pretty much changed the ‘normal’ way we do things. While this affects more than just wealth management, it is worth considering the rise of the tablet in the context of the other events. What we’re seeing is a huge mass of underbanked individuals who interact with the world differently but who still require financial products and services to provide them with the requisite expertise they are lacking.
Let’s imagine this new HNWI. He is generally at a different stage in his life than the previous generation. He began his career later, he had kids later (if he has any), and his wealth management needs are often more developed by the time he seeks out solutions. He also has a job title that didn’t exist 10 years ago. It probably has the word ‘online’ or ‘digital’ in it somewhere. And because he grew up in the age of the internet, he will come armed with more knowledge about what solutions exist in wealth management, whether they are your solutions or your competitors, and he will know where he fits into that equation. He appreciates high-quality user experiences, simple presentations, and the feeling that he is a unique individual. Also, based on his profile, he quite likely owns and uses some sort of tablet on a daily basis.
When he comes in to discuss his needs, what does he expect? What happens if we sit him down with pen and paper and try to fit him into a standard wealth management bundle? What likely happens is that he feels that the relationship manager doesn’t understand him well and he probably takes his business elsewhere. He’s not interested in how he fits into previous categories – he wants his own category. And he wants transparency around pricing. And, if you really want to attract and retain this client, he needs to be shown where he stands in relation to the bank and its products, and if you want to be able to show him that in his own language, you’ll need the simple elegance of a tablet.
Let’s imagine how this scene might play out, armed with this foreknowledge. Let’s imagine that instead of taking this client into an office, where he is positioned in opposition to a wealth manager who is behind a desk and is the only person who can see the information on his screen, that instead they sit out in the open, in a lounge much like a coffee shop, and while they discuss his wealth management needs, our wealth manager is using a tablet to configure wealth management products in real time. As they discuss potential scenarios and bundles of products, the wealth manager is able to query the core system for a price based on the relationship value, and in real time he can share that information with his client in a very transparent and open manner. The client can also manipulate the screen and see how product changes might affect his pricing. He decides he likes one of the options listed before him and digitally signs the paperwork, which instantly begins the account origination work back at the core system.
If ever there was an aspect of banking that is screaming for technological adoption, it is wealth management. The perfect storm of challenges, as described from the outset, requires the right tools in order to sell these new HNWI successfully. miRevenue is one of the tools in that toolkit.
miRevenue’s built-in flexibility and scalability means an advisor can provide real-time information to his client at any time. The ability to price dynamically in real time means that transparency is a real option for wealth management and these new HNWIs. As we imagined in our scene, when you combine this power with the suitable elegance of a tablet you end up with a result that is a transformative user experience. It is experiences like these which will culminate in stronger loyalty in the future. The sense of being known by a product or company is a form of trust – ironically, one of the most commonly cited examples of attachment theory in product design is the tablet itself; using one for the first time is a completely intuitive experience. The individualization available through miRevenue today offers an analogous experience for wealth management and banking.