The Future of Client Acquisition in Wealth Management


Brought to you by WBR Insights

A fresh new year is upon us. That means it's time for businesses in wealth management and every other industry to cast a reflective eye back on the previous 12 months and not only assess what went well and what could have gone better, but also set out objectives for the year ahead — or even the next decade.

Chief among the goals for most businesses as they enter a new year is to acquire new customers or clients. Looking after the ones you already have is important, of course — it's a well-known fact that retention is less costly than acquisition — but you want your business to grow as well, and that means attracting new business.

Changing demographics are altering what's expected of wealth management brands and digital technology is transforming every corner of the industry. Customer acquisition is no exception, so let's cast a critical eye over what we can expect in the coming months and years.

Changing Wealth Management Demographics

Millennials and, perhaps to a slightly lesser extent, Generation Z are going to be a massive consideration for wealth management going forwards. The older end of the Millennial cohort is now approaching their mid-late thirties and are starting to have a serious impact on how business is done — and how money is invested.

The main difference between these two generations and those which went before them is their affinity for technology. Most of these people have either known digital technology their entire lives or at least for a significant portion of it. Because of this, they are naturally drawn to companies that can provide technology-based experiences.

For example, they may expect to be able to manage their investments through a smartphone app and are less likely to want to speak to a wealth manager personally — either in person or on the phone. They may expect to be able to get quick answers to their questions through social media or even artificial intelligence-powered chatbots.

Today's investors are more fickle customers than ever and will think little of switching managers if their current ones fail to meet their expectations. According to Reuters, "Wealth management clients are increasingly willing to pay for financial advice as their needs evolve, choosing an average of five providers, with one-third switching managers in the past three years."

Perhaps even greater a shift than the generational one, however, is the increase in the number of women investing serious amounts of money. It's thought that, by the end of 2020, women could potentially control $72 trillion worth of global wealth, and that's a slice of the pie no wealth management brand can afford to ignore.

36% of women dealing male finance managers have said they felt patronized and over half say they want to see more gender diversity in the investment business. So, if your wealth management firm is starting to look like a bit of a boys' club, 2020 may be the year you want to diversify a bit.

Marketing Automation

When it comes to acquiring new clients, marketing automation software is transforming the way brands can understand the distinct behaviors, interests, and needs of their target market and deliver the services they expect.

Many wealth managers still think of marketing automation in terms of massive email blasts and similar strategies. However, the technology has now evolved to the point where it can provide deep segmentation and personalization, which empowers wealth management brands to deliver relevant marketing content and other communications to the right people at the right time.

"Interest among wealth managers for solutions to support their marketing and sales activities has heightened as the industry is recognizing the strategic value of combining a strong brand with advisor-driven client engagement and digital marketing," says an Aite Group report. "Marketing automation vendors are looking to capitalize on this interest and help firms meet rising client expectations while also mitigating escalating compliance risks brought on by regulations. Trends driving wealth management firms' focus on marketing automation continue to grow."

Data can help your brand capitalize on key moments in prospective clients' lives — such as preparing for their retirement or purchasing their first home — and deliver blog posts, articles, and other content to help them with their decision. This establishes you in the prospect's mind as a company that can help and makes them more likely to come to you for investment advice and wealth management services.

In short, marketing automation not only benefits your business by making it easier than ever to communicate with potential, new, and existing clients, but it also helps you create superior customer experiences that will draw all types of people to your brand.

Final Thoughts

The future is bright for wealth management. However, brands must not sleep on the changes in client demographics and should be prepared to make the most of the opportunities presented by digital technology. Tools like automation and artificial intelligence will be key to attracting new business over the coming years.

Client acquisition is sure to be a hot topic at Digital Wealth 2020, taking place in May at The Ritz-Carlton Fort Lauderdale, FL.

Download the agenda today for more information and insights.

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