Wealth and Asset Management 4.0, the forthcoming study of 2,325 investors and 500 wealth management firms worldwide conducted by ThoughtLab, reveals that the pandemic has upended traditional ways of thinking about investors. To succeed in this new marketplace, wealth and asset management firms will need to revise their assumptions and take a more personalized approach to meeting investor product and service needs.
The ThoughtLab research, which was carried out in partnership with a group of major consulting and technology organizations, reverses prevailing views about investors:
- Myth1: Digital is for young, mass market investors. The study shows little difference in digital tastes. The proportion of investors preferring to use a mobile app to engage with their wealth firms is identical for the ultra-rich, baby boomers, and millennials, at 89%.
- Myth 2: Millennials only want to do things digitally. Another myth. Millennials, like older generations, want personal contact when investing: 46% of millennials prefer face-to-face meetings and 40% prefer phone calls.
- Myth 3: Older and richer investors care less about ESG. Not so. Only 10% of millennials are planning to invest in green bonds over the next two years, versus 15% of boomers—and 50% of billionaires. Likewise, only 22% of millennials plan to invest in ESG funds, versus 32% of boomers, and 36% of billionaires.
- Myth 4: Women know less about investing and are more risk-averse than men. Our study shows that 24% of women have a high knowledge of wealth management vs. 16% of men and that percentages of both genders willing to make high- or very high-risk investments are largely the same.
“Our study shows that wealth management providers will need to replace their assumptions about age and wealth with a new client lens focusing on personal needs and life stages,” says Lou Celi, the CEO of ThoughtLab and program director.
Wealth management providers are already adjusting their approaches.
“Communicating with clients digitally is one thing; the real differentiator is the ability to personalize these interactions to build strong, sustainable, and trusted relationships. Providing sound investment advice, personalized to the specific needs of investors by truly understanding their situation, needs, wants, values and desires, will be the real differentiator,” says Sabrina Bailey, Global Head of Wealth Management, with Refinitiv, one of the study’s sponsors.
An eBook with the results from both surveys will be released in November. For further updates on the program and to access the analysis, please visit https://thoughtlabgroup.com/wealth-management-4/.