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21 July 2019

The rise of 20-somethings

By Dominik Lyzwa, Business Consultant at Comarch.


By the end of next year, half of all investable assets will be controlled by millennials and generation x-ers. What’s a wealth manager to do?

They say when the music changes, so do the dance. In wealth management, it’s like the tune is being switched from classical to a pop one. The young and wealthy are here, ready to take over the market. How to address the needs of this specific client segment?

At Comarch, we are often asked by our potential clients to solve their problems with new, trendy technologies spoken of in the latest industry reports. Still, our expertise indicates that in most cases, this is not the optimal way to go.

Robots everywhere?

Full Robo-advisory is the best example, a couple of years ago it had been predicted that human wealth managers are poised to lose the battle with their robotic counterparts delivering the service faster and cheaper. In 2015 AT Kearney expected a dynamic growth of Robo assets under management (AUM) reaching $2,2 trillion within the next five years.

As the years go by we can see clearly that Robo-advisors have not turned the market upside down. They currently struggle with high asset acquisition costs and low growth dynamics. The US Wealth Management Research indicates that only three of high net wealth individuals (HNWIs) today choose their investment advice provider based on whether or not the robo-advisory feature is there.

While AT Kearney themselves have this year actually lowered their estimations above to less than half of the initial number.

Twitter and the pack

Another thing to be prudent about is using client data from social media to manage the client’s wealth better, especially when it comes to recommendations, risk profile assessment or needs assessment. It’s tempting to reach for the data that is out there—it seems to be so close and helpful.

Yet it might also be on the collision course with the increasing awareness of personal data protection. New regulations like GDPR in the EU rightfully protect client data from misuse. Fumbling through people’s tweets or comments might border on the misuse in itself unless the client agrees to it. Their online interactions are then anonymised and might serve as a basis for sales campaigns.

Doing it right

Let’s face it, investing is not fun. While most of us understand the importance of long-term goals, they often seem so remote from our everyday lives it’s hard to stay focused and motivated.

Gamification may be a cure for that—that is the first way to try and automate things the right way.

It’s about adding game-like elements to an activity so as to encourage participation. Introduced properly to your offer, it may substantially help you with everyday problems of a typical investor, especially staying on target. Boring tasks like risk profiling can be enhanced with elements of competition to create better results.

Overall, you may get a stronger relationship with your clients—Emirates NBD, a leading bank in UAE, introduced an app that rewarded its most physically active users with higher interest rates on their savings. The final ranking was made based on the number of steps the users took and it was 53 million steps in just one month.

Vox populi

The second good way of adding some automation to the mix is voice assistants. Oftentimes, clients prefer switching text messaging to voice communication. According to Deloitte, by the end of this year, nearly half of Americans will have a smart home speaker. By the end of 2023, TechCrunch estimates, the number of voice assistants in use will increase more than three times to eight billion units. Voice assistants can benefit your clients with the quickest, 24/7 response time, and in so doing, they can relieve your advisors’ workload.

In the capable hands

This is where artificial intelligence (AI) gets into the picture. Connecting the dots in a way we sometimes would not even think about is what gives AI the upper hand. It relates to understanding needs, finding patterns and interconnections that can be used as a basis for transaction predictions or product recommendations. If someone spends money in a certain way and for specific purposes, then it is likely that product X will be useful to them.

And that is your third way to automate reasonably. It might, and should be, about the client—but we believe implementing AI algorithms to support your employees is what really goes a long way here. Keep in mind that millennials are on both sides of the relationship. At Comarch, to help the advisor, we are analysing their clients automatically to look for the best matches for an appointment or new product offer. No more spending long hours trying to figure out who to call first.

Bigger piece

In 2018, we welcomed more than 2,3 million new millionaires to the world, which is +5,8 per cent year to year. At the same time, global wealth increased to $317 trillion and this number is growing steadily since the 2008 crisis.

The total AUM is to reach $145.4 trillion by 2025, which is two times more than total AUM in 2016. Moreover, by 2021, the global volume of net investable assets of high-net-worth individuals will increase by 25 per cent to almost $70 trillion.

New clients have new expectations; still, they will not resign from human touch. There are many options to digitise your processes but popular may not mean optimal for you. do not rush in.





CPI Financial was established in Dubai in 1999 to meet the needs of an ever-expanding financial community, offering a comprehensive portfolio of market-leading products and services tailor-made for the banking and financial services sectors.

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