Recent estimations indicate that Europe’s forthcoming generations are set to inherit around £2.3 trillion from Baby Boomers in over the next decade. Although some of this wealth will be pledged to charities or siphoned off in taxes, the majority of this vast inheritance will flow into Gen Xers and Millennials.
This shift in capital presents a significant opportunity for wealth managers and financial advisors to build new relationships with these younger generations and capitalise on the biggest wealth transfer in history.
This is my first blog for the community. In my upcoming articles I will discuss top tips for marketers when interacting to the new generation of buyers. I hope that my contribution will help provoke new ways of thinking around how marketers can drive more effectiveness and efficiencies into their firms’ go-to-market activity – ultimately to deliver more value and definitive contribution to the bottom-line. Having said that, your comments are always welcome too! The market is constantly changing, so I sincerely look forward to learning from each other’s experiences.
Passing the mantle
Clearly, the numbers involved in this wealth transfer are substantial. However, the increasing level of competition in the industry is putting Financial Services (FS) firms under pressure to differentiate themselves to help secure their place at the table.
Simply put, the spread that money managers, financial advisors, and lenders command has been falling for more than 20 years and has subsequently caused immense strain on their revenues. The industry has no choice but to look for ways to reduce costs and increase productivity.
In addition, the current business climate is accelerating the emphasis that firms are placing on reducing their customer acquisition costs and increasing their sales efficiency by finding new methods to ramp up engagement.
So, how can FS firms build meaningful relationships with these generations of new customers while maintaining the same level of white glove services to their existing clients? Part of the answer can be found in data and technologies.
Truth about trust in the digital world
When it comes to client engagement, the gold standard for FS is often anchored around building trust and long-term relationships. These relationships – and the required trust – however, cannot be built overnight.
What complicates matters is that the younger generation of buyers tend to be technology savvy and digital-first. If relationship managers and advisors want to gain a competitive advantage, they do need to think about speaking in the language that would resonate with these new buyers and engaging with them in a way that they understand and respond to.
Advisors or relationship managers need to position and present themselves as authentic and trustworthy voices across every media touch point being used by these younger clients. We’re already beginning to see these winning firms start to embrace a digital-first approach, by adopting technologies and utilising data to help enable their customer-facing teams to deliver consistent and engaging buyer experiences across channels.
Getting ahead of the game
It is commonly understood that the younger generation of buyers tend to be more sceptical of traditional organisations and are very relationship driven. They have grown up in the experience economy and the digital era where they expect to form closer connections to brands than previous generations, regardless of the means of communication.
To be able to build genuine trust with these new generations of customers requires an understanding of their financial preferences, priorities and attitudes – FS professionals will need to be able to adapt their processes into the modern buyer’s lifestyle, delivering exceptional experiences to buyers wherever they are. Many of these new mechanisms for delivering such experiences evolve around content including social media, interactive experiences, websites, fulfilment orders, emails and so on.
In fact, social media is becoming increasingly central to a FS professional’s playbook. They can leverage social media to create and scale their personal brands online, helping them to build meaningful and authentic relationships that cut through the conventional corporate noise. With access to the right digital tools and platforms, relationship managers and advisors can interact with their networks, participate in organic conversations, and share timely, relevant content with prospective clients – all in a compliant fashion to remove any undue risks to their firms.
Ultimately, technology and data are what is enabling FS professionals to effectively manage the digital environment at scale, making it easier to retain their existing clients and win over new ones. By taking advantage of digital tools, FS firms can deliver a consistent and linear content experience, which helps provide the critical foundations required for long-term relationships and trust to be built.
To find more about how digital technology can help capitalise on the revenue opportunity presented by the Great Wealth Transfer, please contact Winnie Palmer, EMEA Head of Marketing at Seismic on email@example.com.