Digital experience strategy: Capitalizing on the $84 trillion wealth transfer

By Joe Scheffler, Director of Client Engagement, Think Company

It’s being called the greatest transfer of generational wealth in the history of the world. According to the NY Times, over the next decade, Baby Boomers will pass along $16 trillion to their Gen X, Millennials, and Gen Z heirs, a jaw-dropping $84 trillion total by 2045. When it comes to family wealth, there’s never been an inheritance like it, and while a boon for the wealth management industry, it’s an opportunity that comes with significant challenges.

First, the industry will have to shift its focus and adapt to the needs of younger generations. With different investment priorities, they’ll be seeking products that differ from those of their predecessors. Equally important are the digital experiences they’ll be expecting if you want to win their business.

Future experiences

To capitalize on this once-in-a-generation opportunity, wealth management firms must adopt a modern digital strategy that is simple and intuitive for advisors to use. Younger investors value efficiency and ease of use, so they’ll seek those capable of providing multiple services fast and accurately. Further, they’ll expect every interaction to be informative and provide a better understanding of what’s happening with their investments.

Finally, any digital strategy needs to scale, because not only is the amount of wealth being transferred enormous, Boomers usually have multiple heirs, which increases the potential number of new clients.

Thankfully, well-implemented digital tools can increase productivity while also improving the employee experience (EX) for advisors. Additionally, user-friendly, self-service wealth management apps should be available to customers. Younger investors prefer to use apps to explore opportunities and understand investment performance.

The future is all about the overall digital experience, and apps are how the industry and customers will get there.

Building a digital experience strategy with apps

Now is the time for wealth management firms to create a digital experience strategy that will enable them to compete for new business and capitalize on this massive generational wealth transfer. Here are the main points to consider when embarking on a digital strategy to accomplish this:

• Conduct customer research: Understand what heirs expect from their wealth management experiences. For example, maybe you have a lucrative subset of Generation X who requires more personal relationships with advisors based on formal and informal meetings. Conduct “voice of the customer” research on a regular basis to keep pace with trends and changing customer desires.
• Determine strategy and plan: Map out your goals and tie them to your strategy. For instance, is your emphasis going to be on winning new clients or serving the ones you have at a deeper level? Plan this out based on your customer research data. Expect the solutions you need, for both customers and personnel, to be overwhelmingly, if not entirely, digital from the outset.
• Constantly improve: Create a list of improvements to be made based on feedback that grows and evolves with time. Build in listening posts to regularly check in on what customers are experiencing. This can support a trial-and-error approach that’ll identify gaps and enable resolution of issues.
• Design and develop: You’ll need to employ a DesignOps framework with processes and measures that support the development of scalable solutions. You’ll also need a process to optimize development—most likely DevOps or a similar agile framework—and one to manage how these teams will collaborate. While you may be a wealth management firm, you’ll need to think like a product team.
• Determine resources: Get a handle on what design and development resources are going to be required. Do you have internal developers and designers to achieve your goals? Do you need to look outside the firm? Determine the resources you’ll need and how you’ll get them.
• Be consistent and easy: Employees are critical to customer satisfaction, so listen to their voices as well, particularly front-line advisors. Can you streamline their workflows? Determine what processes cause the biggest pain. Advisors are often working with different tools to manage each financial product, and these are typically not well integrated, nor are their user interfaces consistent with one another. Enabling advisors with consistent, integrated tools can go a long way toward helping them provide clients with the best possible product mix to meet their financial goals.
• Consider ethical and compliant AI: Artificial intelligence can drive greater efficiency and deliver a scalable online experience similar to working with a human. Harness the technology, but be sure there are “guardrails” in place to prevent generative AI from including incorrect or non-compliant information.

Ready for the transfer?

This transfer of wealth is a huge opportunity for wealth management firms. Delivering the digital experiences younger generations expect presents considerable challenges, but the potential rewards are staggering. What’s more, this will change how the industry operates, so those who don’t adapt will be left behind.

Wealth management firms must strategize and plan to meet the needs of digitally inclined generations. Those that do will not only thrive but cement their futures.

Joe Scheffler is Director of Client Engagement at Think Company, a consultancy that designs and builds world-class digital experiences for enterprise organizations.