Most advisors may be seriously off target when it comes to technology and demographics, according to new research from fintech firm Refinitiv.
Nearly 90% of billionaires across all age groups in a global survey of investors and wealth managers said that their preferred channel for engagement with their financial provider was a mobile application, according to “Debunking Wealth Management Myths: 3 Outdated Assumptions About Investors”, a recent Refinitiv report.
Myth One: Technology Is For The Young
The finding about billionaires is evidence of Refinitiv’s first myth: that digital savvy remains the preserve of millennials and younger generations. In fact, Refinitiv’s research found that older and wealthier clients prefer digital channels as much or more than millennials.
“There’s this notion that people prefer to talk to advisors and they’re not engaged and looking at technology, especially if they are wealthy, but that’s not the case,” said Sabrina Bailey, Refinitiv’s global head of wealth management. “There’s now mainstream use of digital media across the board for all elements of life, and it’s finally seeping into financial life.”
The stereotypical older client still prefers the face-to-face meeting, but the study found that baby boomers of all wealth levels were just as likely to prefer face-to-face meetings (47%) as millennaiils (46%). What’s more, just 41% of the ultra-high-net-worth segment of the study preferred face-to-face meetings.
Mobile devices, on the other hand, were preferred by 89% of boomers and 89% of millennials for advisor-client meetings.
The Covid-19 pandemic has accelerated a shift within all generations towards digital channels like provider’s websites, virtual conferencing and mobile applications, said the study. Yet there were low levels of interest in communicating by e-mail, messaging applications, social media or text.
“An inability to get together in person has helped create this shift. I think there were some notions before about the safety of interacting digitally, a feeling of risk, but the pandemic was a tipping point,” said Bailey. “People also realized that time is the one resource they can’t get more of, and with virtual conferencing they can save 30 minutes to an hour of time just by engaging virtually every quarter rather than face-to-face. It would be very hard for people to give up that newfound time.”
Myth Two: ESG Is For The Kids
Similar to digital communications, another pervasive wealth management myth states that only younger investors, like millennials, are really interested in ESG, according to the study.
Refinitiv’s research found tepid interest in ESG investing among both boomers and millennials, with boomers expressing significantly more interest than younger investors. Baby boomers were more likely (15%) than millennials (10%) to plan to invest in green bonds, invest in ESG funds (32% to 22%) and use advice on social impact (36% to 29%) over the next decade.