How Wealth Management Firms Can Deliver Next-gen Wealth Management to Millennials and Gen Z?

A 2022 study predicts that by 2045, younger generations will inherit $84.4 trillion in wealth. Such multigenerational wealth transfer is a matter of profound discourse for wealth management companies, as they need to be cognizant of the overall landscape to better structure their wealth management tactics.

The Changing Landscape of Wealth Management

The wealth management industry is undergoing a major transformation, driven by several factors, including the impending wealth transfer to Millennials and Gen Zers. To meet the needs of these generations, wealth management firms need to deliver next-gen wealth management.

Wealth Transfer as a Catalyst for Change

Baby boomers and Gen X are beginning to pass down their wealth to their children and grandchildren. In 2050, it is estimated that younger generations will receive a total wealth transfer value of $237 billion each year from baby boomers.

Here, it’s noteworthy that Millennials and Gen Z are very different investors than the likes of baby boomers and Gen X. They are more digitally savvy and have a higher tolerance for risk. They are also more interested in sustainable investing and social impact investing.

Millennials’ Intent to Switch Wealth Managers

Surveys have shown that a significant 36% of Millennials plan to switch their wealth managers in the coming three years, while about 50% of individuals who have recently received or expect to receive a substantial wealth transfer have already made the move to new providers in the past three years.

There are a multitude of reasons why Millennials and Gen Z are more likely to switch wealth managers. One reason is that they are more likely to do their research and make their own investment decisions. Another reason is that they seek wealth managers who can offer them personalized advice and services.

The Impact of Wealth Transfer on Provider Choices

The wealth transfer is also having an impact on the choice regarding wealth managers. These generations are more likely to choose digital wealth managers and robo-advisors than traditional wealth management firms.

Amid such a shift, wealth management firms must keep pace and free up their advisors’ time to focus on clients. To do so, they need to eliminate paper-based processes, make onboarding experiences smoother, and leverage a higher level of automation. However, these objectives cannot be achieved with siloed processes.

Modernizing Wealth Management Practices

Wealth management firms need to transition to digitized, streamlined processes to reduce errors and save time so that they can align their services better with the expectations of Millennials and Gen Z.

Overcoming Paper-Based Processes

Wealth management firms must actively address the challenges posed by paper-based processes. The mountains of paperwork have been prone to errors, inefficiencies, and delays. 

Instead, by embracing digitization and cloud-based solutions, firms can effectively reduce the reliance on physical paperwork. Secure and efficient software solutions help manage client documentation digitally, ensuring error reduction and quicker access to vital information. This helps businesses streamline operations and improve the experience in line with the expectations around digital wealth management workflows.

Enhancing Onboarding Experiences

Traditional wealth management onboarding processes have often been complex and time-consuming, involving extensive documentation. Because a smooth onboarding experience is critical in shaping client relationships, wealth management firms must enhance this initial interaction. 

By using user-friendly online platforms and applications, firms could simplify the onboarding journey, making it more accessible and convenient for clients. E-signatures, online document submission, and interactive dashboards are among the tools that can be employed to create a more efficient onboarding experience.

The Role of ServiceNow FSO in Next-Gen Wealth Management

ServiceNow Financial Services Operations (FSO) is a cloud-based platform that helps wealth management firms digitize and streamline their operations. FSO provides a comprehensive set of tools and capabilities that can be leveraged to support all aspects of the wealth management process, from client onboarding to investment management to reporting and compliance.

Leveraging ServiceNow FSO for Transformation

FSO can help:

  • Automate manual tasks: FSO can automate a wide range of manual tasks, such as onboarding, trade processing, etc. This can free up wealth management professionals to focus on more strategic tasks like providing personalized advice to clients.
  • Streamline workflows: FSO can further help wealth management firms streamline their workflows by providing a single platform for managing all aspects of the wealth management process.
  • Improve visibility and control: The platform provides wealth management firms with a real-time view of their operations. This visibility can help them to identify and address potential problems early on.

Deliver Next-Gen Wealth Management to Millennials and Gen Z with ServiceNow FSO

Improved operational efficiency, reduced costs, diminished silos, enhanced customer satisfaction, and increased revenue — the benefits of using ServiceNow FSO for wealth management are manifold.

However, to get the most out of your FSO investments, partnering with a ServiceNow implementation partner like Xceltrait is critical. At Xceltrait, for instance, our team of experts can help navigate the intricacies of adopting and running ServiceNow FSO for increased agility, flexibility, and proactivity in wealth management operations.

We can cater the solution to your business requirements and ensure that the expectations of your Millennial and Gen Z customers are addressed. Book a strategy call today to learn more.

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