The financial services industry experienced many shifts and regulatory changes in 2017. As financial professionals navigate their way through effects of last year’s trends, the financial services and fintech industries show no signs of slowing down this year. So, what will financial services firms focus on in 2018? Let’s take a deeper dive into the top five wealth management trends to watch this year.
Generation X Becomes the Focus
Everywhere you look, the financial services industry is focusing on Millennials. It has always been a prudent decision to align a business with the future, and many advisors will find success with this demographic - especially considering the generational wealth transfer is only just beginning. (To read more from Advicent, see: Preparing Millennials for Home Ownership (or Not).)
A much more lucrative demographic, however, is right in front of advisors: Generation X. In 2018, many firms will choose to focus on this otherwise underserved demographic, which is poised for a much larger growth in assets than any other generation. Generation X is also poised to receive more transferred wealth than Millennials until at least 2030 and will see the largest growth in financial assets in the coming decade, easily outperforming all other generations. As Generation X moves into the most financially productive years of their lives, they are significantly underserved. Firms and advisors must take advantage of this previously missed opportunity in 2018 to achieve greater success.
Simplification Takes Center Stage
It is common knowledge that simplified information is often easier to digest than complex data analyses and presentations. The same can be said for both advisor and client technology experiences. Current advisor tools are complex and sophisticated, with little work done to create simplified workflows and streamlined processes.
As firms continue to move forward with uncertainty around the DOL fiduciary rule enforcement, they will look for opportunities to create efficiencies. This efficiency will come in the form of simplification, not only in the tools themselves but also in the simplification of the firm’s overall technology stack.
Delivering consistent experiences across an entire enterprise will begin to take center stage in 2018. Multiple business units across an organization leveraging different technology to accomplish similar goals causes inconsistencies in client and advisor experiences, reporting, and compliance workflows. (To read more from Advicent, see: How Tech Is Improving the Advisor's Sales Process.)
By leveraging a system that is scalable for any client, both firms and advisors can eradicate pain points across business silos and ensure a streamlined sales process is followed for all clients. This will simplify training and go-to-market strategy development for enterprises that seek to deliver best-in-class offerings, as well as minimizing the amount of duplicate data entry required.
Efficiency Becomes Key
Quickly discovering client needs and delivering a solution is already important in client relationships, but it will become critical for firms that wish to remain successful in 2018 - whether they are developing a quick, goal-based financial plan to sell an insurance product or a five-minute retirement report.
Leveraging technology that generates plans in minutes and empowers advisors to interact conveniently with clients will produce new workflow efficiencies, allowing advisors to serve more clients. It is imperative, therefore, for firms to select technology vendors that provide - and continually improve upon - efficient and enriching experiences to help the field team quickly deliver high-quality advice and solutions.
Financial Planning Is the New Prospecting
Many firms view holistic financial planning as a time-consuming task that gets in the way of quickly delivering products to clients. However, nothing can be further from the truth. The financial services industry is beginning to realize that delivering financial plans to every single client can be not only lucrative but also efficient. By delivering a holistic financial plan, prospects will better understand how the firm’s services and products will benefit them.
Imagine an insurance field representative identifying an additional mortgage opportunity and being able to not only verbally explain but also visually demonstrate the positive effects the solution could have for the prospect’s financial future. Suddenly, this situation moves from a sale focused solely on one product to a holistic solution that will help the prospect throughout their life. Ultimately, this holistic approach to client relationships will ensure long-term success for both the client and firm. (To read more from Advicent, see: Financial Advice Using the "As-a-Service" Model.)
This article was written by Alex Peter, product marketing strategist at Advicent.