By Popular Demand: Why Consumers Will Change Advisors’ Product/Market Approaches


Roubini ThoughtLab teamed up with SEI and other leading wealth industry firms to conduct a study, Wealth and Asset Management 2021: Preparing for Transformational Change. It looks at the changing demographics of wealth, from boomers to millennials, with very different needs, behaviors and ways of communicating. The study suggests that over the next 5 years, the impact of 5 megatrends “will be profound.” The following post focuses on megatrend #3: Rethinking product and market approaches.

We see it all around us every day. The change in how business gets done leveraging new network capabilities of the internet and social media. And think about how our personal lives have changed…no Friday night trips to the video store (Netflix) or hailing a cab (Uber). When was the last time you physically visited your bank or went to the library to research something? Why go shopping when you can order everything online and have it delivered to your doorstep?

Yes, our world is changing and we have to be ready for that change. Some things warrant our attention and action, other things will fall by the wayside as the next trends emerge. Where should advisors focus?

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Megatrend #3: Rethinking product and market approaches

Changing customer demands drive change – and that’s causing investment providers to reset their product priorities. That includes:

  • Creating more customized products
  • Adding smart beta and passive funds
  • Moving to specialized, holistic wealth advisory services

And it doesn’t stop there. Investment providers are modifying their strategies for acquiring (and keeping) a more diverse set of customers. They include using technology to broaden their client base (57%), extending business to family members and friends of clients (55%), segmenting clients by demographic and psychographic characteristics (50%) and changing business models (46%).

Technology will become standard for the wealth profession, as existing wealth firms build up their own fintech capabilities. But competition will heat up as:

  • “Born digital” companies enter the market
  • Traditional providers expand their offerings to create more digitized, personalized and democratized products

How do you apply these learnings to your business?

As you plan for 2017, think about your 5-year plan and beyond. The Roubini study points to great opportunities to grow your business, but the foundational focus of the business may have to change to spur that growth. Is your business set up to take advantage of this megatrend (and others) that will change our business?

Ask yourself:

  • How do I create value for my clients? Is it through investments, or is it my advice in other planning and wealth management areas? If it’s investments, how do I differentiate my business with planning advice?
  • Are the investments in my offering varied and innovative? Is my story fresh and does it provide meaningful differentiation relative to my competitors? This is especially important for advisors who provide less value-add from advice.
  • What does my client base look like today? Do I have a mixture of age groups and multi-generational family relationships?
  • Do I have a digital way to attract and service clients? Can I provide a business solution for clients who don’t require my full level of service at a discounted price?

Yes, our world is changing and with change comes opportunity – but only to those willing to embrace change and make the most of what the industry deals. What has been done in your business has served you well and has made you successful, but that doesn’t mean that it will continue to drive your success. Take a look at the opportunities above and determine how best to incorporate a few of them into your business model. My guess is that you will be happy you did.

Download the study, Wealth and Asset Management 2021, for more on this megatrend.

Previous megatrend posts on Practically Speaking:

Are Advisors Ready for “The Big Shift”? (Hint: You Better Be)

The Drive to Digital: Make it a Road Well Traveled

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John Frownfelter

John Frownfelter

John Frownfelter is the investments contributor for Practically Speaking and the managing director of investment solutions within the SEI Advisor Network.

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