We are on the precipice of a $30-trillion transfer of wealth1 from baby boomers to Generation X and millennials. However, it’s going to be anything but business-as-usual over the next 30 years. The demographic inheriting this windfall loves technology and embraces change and disruption. Yet at the same time, “wealth management is one of the least tech-literate sectors of financial services.”2 This is a clear red flag for old-school service providers who are unable to evolve.
Ultimately, the financial companies who emerge as winners will need to understand consumer preferences and leverage new technologies. The changes are already happening, evidenced by the onset of “robo advisors” and, increasingly, with social aspects of investment management.
It may be early days, but it is critical to engage the millennial group and make inroads as early as possible. To do so, incumbents will have to understand these preferences and, in response, create a more human and credible marketplace position by using the tools this demographic prefers.
To learn more about millennial money and the socialization of wealth management, please read The DeNovo Q2 2016 FinTech ReCap and Funding Review.