Representatives from a variety of wealth managers all agreed that one of the industry’s highest priorities is preparing for how to best service the next generation of investors.
Over the course of two panel sessions at yesterday’s (12 November) Wealth Management Association annual summit, different strategies were put forward for how to gain and retain younger clients.
Jonathan Wragg, chief executive at Investec Wealth and Investment, said that a tipping point is being reached where most investors will be “digital natives” or those roughly born after the 1980s that have grown up with computers and the internet.
“We have to think of different ways of engaging these people in wealth management, targeting them as they begin to accumulate assets,” he commented, admitting that in terms of client numbers it’s been a slow start on younger investors.
Nick Hungerford, director and chief executive at Nutmeg, said that 25 per cent of their customers are totally new to investing, although in many ways high-net-worth clients are easier to service because they “get it” more, while those just starting to save make the most use of the firm’s helpline.
JPMorgan International Private Bank’s managing director Tracey Reddings explained that they only deal with such high-net-worth individuals, rather than mass market solutions, but the demands for advice, information and access are similar - “which is where the robos come in”.
Stephen Ford, head of wealth and investment management at Brewin Dolphin, agreed that having tried to engage with clients more recently, the firm has found most are demanding more control.
“We want to get to clients earlier and younger,” he commented, noting that the industry still has not got the kind of brand recognition that Amazon or Apple do amongst millennials.
On that front, the WMA’s chief executive Liz Field used the platform to launch its ‘millennial forum’ which was seeking young and dynamic staff from member firms to participate.
“We want to discuss the thornier business issues that impact our ability to attract, retain and engage younger clients,” she stated, adding that a white paper on the subject would be produced soon.
Finally, Killik & Co senior partner Paul Killik said even bespoke firms targeting older, higher-net-worth clients, have to move with the times.
“We have watched closely the average age of clients, mid-50s is the peak savings and peak inheritance age, but models have to change. We’re concerned that once millennials get to 50 they won’t go off and find bespoke services, so that is a long-term issue we’re looking at.”
peter.walker@ft.com
