Millennials: Redesigning Wealth Management

Believe it or not, it’s been just over a year since this blog looked at the financial and populational growth of Millennials. As it has remained a prevalent topic of discussion for bylines and industry panels alike, Seismic continues to cover Millennials’ characteristically transformative impact on financial services, particularly wealth management.

It’s come to an inflection point for those who have been inside the industry for decades, as James Price, President and CEO at Advisor Group recently explained to FundFire:

And when you throw the demographic changes going on in society, whether it’s Millennials, which obviously is a big subject, and technology and the use of technology more broadly and I think the future clientele adopting technology faster than the advisor base themselves—and I think there’s also this uniqueness around both the transfer of wealth, some $30 trillion but maybe even more importantly, with health care and wellness programs under the Affordable Care Act, people actually potentially outliving their retirement.

But beyond adjusting to the behavioral differences experts identify with each proverbial changing of the generational guard, how exactly have Millennials altered the look and feel of wealth management thus far? Well, to start, Price’s point on matching a young, tech-savvy clientele with an aging workforce has forced firms to overhaul their recruiting methods in hopes of building a fiduciary image and narrative that resonates with the needs and wishes of Millennials. These new advisors aren’t just harnessing the capabilities of technology platforms to provide digitally personalized experiences; they’re dressing the part too. By holistically communicating with their prospect, advisors are able to keep the conversation accessible and comfortable. “If we’re meeting at a coffee shop and I’m dressed up and the client is in jeans and a T-shirt, it’s going to make everyone feel uncomfortable,” said Peter Lee, founding partner of Summit Trail, to The Wall Street Journal.

Do Clothes Really Make the (Wealth) Manager?

Aesthetics they may be, but so is UX design at face value—something that has changed dramatically since the dawn of the millennial investor. A long-form blog post from Digital Telepathy, a UX strategy and design agency, highlights the manners in which financial services aesthetics have, due to do market demand, evolved. Predicated on statistics like this one from Deloitte—57 percent [of Millennials] would even change their bank relationship for a better technology platform solution—and this one from Experian—77 percent are willing to change financial accounts if they learned about a better alternative—firms, whether traditional incumbents or fintech challengers, have had to work harder than ever to attract and, more importantly, retain clients.

Three areas of UX influenced by Millennials according to Digital Telepathy are:

  • Corporate Branding: Where traditional branding was quite rigid and formal, symbolizing strength, longevity, and security, it has been impacted and influenced by the softer, more humanistic approach of fintechs like Pay Pal and Acorns. Undoubtedly, any rebranding by firms today takes it semiotic cues from the likes of Apple or Google more than the stalwarts of finance.
  • User Interface: Until recently, website UI was counterintuitive and, quite frankly, rather drab and intimidating, even for technically savvy Millennials. Now, everything is up for grabs when it comes to design, provided one doesn’t actually utilize everything, but instead keep the experience simple yet highly functional, even on initial exposure.
  • Content Tone: These aren’t your pedantically patriarchal finance professor’s marketing campaigns anymore. The content tone of today’s efforts, whether visual, written, or oral, takes a more peer-to-peer, conversational tack than what was common over previous decades. Rather than deliver information with necessary authority, firms, led by fintech challengers, do so with humility and optimism. Objectively speaking, however, this is more than likely the only approach the industry could have taken after 2008; the do as I say not as I do mantra comes to mind when summarizing Millennials’ opinion of wealth management as they watched their parents’ 401ks crater.

Since the Great Recession, it’s been a tumultuous and expensive reset for wealth managers, and financial services firms in general, but while market forces are responsible for much of the industry’s transformation, they can’t be blamed for the myopic complacency which preceded it. The only constant is change, so they say, along with death and taxes, according to others.

So, if you enjoy managing equities via mobile app, appreciate the navigational ease of a bank’s website, or just plain love a wealth manager’s quirky, emotive advertisement, thank Millennials. And chances are they’re not done yet.