Private wealth managers are facing one of the most important generational transitions in living memory. 

As a younger generation comes of age, we are seeing the emergence of two distinct audiences with vastly different needs, expectations, and values: young tech-natives and an older, more traditional audience.

As client services businesses, this change matters for wealth managers and retail trading platforms. These two audiences behave very differently and to succeed in the long-term, firms will have to ensure that they are able to service both effectively.

The big question is in how they can attract a highly complex but increasingly affluent younger audience, while retaining and remaining accessible to an older generation.

Technology for all ages

Central to solving this problem is technology – giving firms the power, flexibility, and functionality to simultaneously tap into these highly sought after audiences. However, the extent of intergenerational preferences and the speed at which they can change should not be underestimated – pushing managers to think carefully about choosing the right technology and functionality that will enable them to tailor user experience to an increasingly diverse user base.

Technology, while ubiquitous in wealth management, needs to provide firms with the tools to deliver the highest level of critical functionality while being able to respond to rapidly changing demand. The need for connectivity, automation of basic processes and easy access to market or portfolio intelligence cut across demographics, but understanding generational nuance and how it can be tailored to better meet demand is essential to long-term success.

Having holistic basic functionality is therefore essential – giving firms an extensive toolkit to service any audience. However, tools, features and user experience that deliver these services to individuals need to be carefully crafted. The older generation, for example, is broadly characterised as being more loyal to managers, with typically lower risk appetites and with clearly defined values, according to a recent EY report. 

When the RegTech bubble bursts, the economy will suffer

Giving this demographic access to longer-term metrics on performance, advice delivered by humans, robust risk management and through a desktop platform are important considerations for providers.

Younger generations’ needs on the other hand are widely seen as more complex. The majority of this audience has been raised on computers or smartphones and therefore expects service providers to offer the efficiency and convenience of mobile technology that they have become accustomed to. In contrast to older generations, EY’s survey revealed that they are more open to switching manager, more interested in digital offerings, more plugged into social trends and more attuned to investing in line with their values.

While younger and older generations have distinct preferences, the common denominator will always be technology and performance. Rather than adding technology as preferences evolve, firms are much better placed to fundamentally address legacy systems and processes by modernising their tech stacks to stay ahead of the curve.

A lifetime pursuit

Managing individual wealth should not be seen as a short-term pursuit, but a process than can last for decades or even a lifetime. Wealth managers need to have this mindset when approaching their technology – ensuring that they have strong foundations that allow them to stay ahead of the curve and adapt to rapidly changing consumer behaviour over the long-term.

To future-proof their businesses, private wealth managers need to ensure that their underlying technology can help their businesses adapt to rapidly changing preferences and behaviours. The tools, automation, and functionality to serve both age groups and the many different sub-groups within them already exist. 

Tech providers exist to arm firms with all of the functionality they will ever need straight out of the box – allowing wealth managers and retail trading platforms to tailor their user experience to best suit their customer’s unique and sometimes diverse needs in a controlled and scalable manner.

Could codeless software testing transform your business?