The (entire) financial services industry is faced with two impending challenges that will undoubtedly hit institutions, advisory firms, and advisors like a freight train if they remain unprepared or so choose to ignore them.
Both issues deal with the aging population and significantly impact both the current and the future state of wealth management—along with what it means to provide an elevated client experience.
It’s critical for firms and their advisors to not only acknowledge the significance of these issues but to work closely with industry peers and solution providers to overcome their challenges.
Dementia is on the Rise
According to the World Health Organization, Dementia sufferers are projected to rise in numbers to an alarming 78 million by 2030 and 139 million by 2050.
We know first-hand that wealth management firms and financial advisors are beginning to feel the stress of whether their aging clients are beginning to show early signs of Dementia or not.
The unfortunate reality is that Advisors are not equipped to make a proper assessment and nor should they be. However, to make things worse, many of the current systems and methods used to protect clients, their information assets (Documents), and importantly their financial assets, are instituted as reactive measures.
However, technology, such as Digital Vault solutions, exist to protect client information and documents, while enabling clients and Advisors to provide secure and trusted access to family members and third parties as a way of not only keeping confidential information safe but sharing it with the right individuals should they need access to it.
Dementia is incredibly difficult for everyone involved; including financial advisors and fiduciaries. Tackling this issue at hand proactively checks off assurances and provides Advisors with the confidence they need to continue providing sound advice.
The Great Wealth Transfer
The second very real and impending issue facing the industry is the intergenerational transfer of wealth, also known as The Great Wealth Transfer.
This mass movement of wealth transferring to younger generations is going to massively shake up the entire industry. Perhaps one of the most alarming factors impacting traditional wealth management firms is the variety of reports stating anywhere between 45% to 80% of heirs will likely switch financial advisors.
For Financial Advisory firms and RIAs, Broker-Dealers, Family Offices, Credit Unions, Banks, you name it, it simply means this; digital capabilities are no longer a “nice-to-have”—they are emerging as a central value proposition for the new generation of investors.
Here are three important considerations to help Advisors prepare for the Great Wealth Transfer:
- Implementing a robust, digital-first strategy is a must
- Digital literacy is fundamental for staff and across your organization
- Firms and Advisors must look for opportunities to deepen client relationships by providing value to spouses and family members
Overcoming Impending Challenges
With respect to both impending issues, Dementia, and The Great Wealth Transfer, having the right systems, tools, and technologies in place, can and will equip firms and advisors to confidently address these challenges head-on while remaining competitive, and importantly, winning the heart, mind, and wallet of the consumer.
A digital vault platform like FutureVault is fundamental to the collection, preservation, maintenance, and protection of critical information and documents — enabling advisors and the firms/institutions that support them to “keep their house in order” while ensuring that an exceptional client experience is delivered at every intersection of client interaction.
