For years, Wealth Management firms have talked about digitizing their ecosystems to enable an Omni channel experience for clients, client stakeholders, and advisors. But because of the infrastructure complexity that most companies are sitting on, few have realized this goal.
I suggest that the industry as a whole is running out of time to get it together. Why? We are on the cusp of a major generational transfer, one unlike any we've seen in our lifetime. In just ten short years the following will occur:
According to research by Cerulli Associates, the average age of a financial advisor (FA) is 50.9, with 43% being older than 55. What's more, 30% plan to retire or leave the industry in the next decade. At the same time, fewer college graduates are choosing financial services as a career, resulting in too-few advisors. The shortage of FA entrants will naturally force advice standardization and a continued push for self-service. Did I mention these numbers are conservative? At some firms, the average FA is closer to 60.
Millennials -- of whom we have talked about ad nauseam for years -- will be solidly middle-aged and in full wealth accumulation mode. There's no need to belabor the point that this cohort will expect frictionless digital experiences.
Finally, a 12-year-old today will be out of college; they will be both employee and purchaser. I posit that this cohort who has grown up with the Smartphone -- effectively with more computing power in the palm of their hand than the original IBM mainframe -- are not just a force to be reckoned with, they're game changers. As the first generation of digital natives to come of age, there's no question their technology demands won't just be high, they haven't even been dreamed of yet.
In large institutions where it's not uncommon for a single project to take 18-24 months, and with dozens of existing capabilities still left to digitize, CIOs find themselves in the unenviable position of having to play catch-up while figuring out how to stay current with robo, AI and an unending onslaught of Fintech disruptors. So, with just ten short years before boomers are retired; millennials and GenX are in charge; and Generation Z is just getting started, there's no time left to figure out a plan. If you aren't building a digital ecosystem already you may just be too late.