Big tech companies are everywhere in our lives, but is wealth management their next frontier? Probably not, but a sizable number of people surveyed by Accenture said they would consider using Google, Apple or Facebook if these companies had a wealth and money management offering.
The question was part of a wealth management consumer report entitled, “The New State of Advice,” from Accenture, a global professional services company. One of the study’s big takeaways is that the next generation of investors have different needs and wants than their parents, and that financial advisors who fail to provide the holistic advice and products they want, along with the digital and personal engagement models they desire, will be losers in the intergenerational wealth transfer.
Sixty-nine percent of the respondents said they would turn to Google, Apple or Facebook for wealth and money management services if the companies offered them. Not surprisingly, that number rose much higher among younger respondents, to 95% of the Generation Z cohort and 83% of millennials.
Accenture believes it’s because these companies provide consumers easy access to information and technology tools, better integrate personal and financial data and can demonstrate a track record of innovation.
“These investors have expectations that have been set by the simplicity and seamless experience they’re getting from big tech,” said Rachel Silver, managing director of capital markets and wealth management at Accenture, in an interview.
“And they expect that same experience when it comes to managing their money and getting advice,” she added. “However, big tech companies can’t offer all of the products that we know that investors want. Investors want advice across a broad spectrum of products, including banking and lending products, insurance and tax advice.”
The Accenture report said an emerging class of newly engaged investors have zeroed in on the likes of cryptocurrencies and environmental, social and governance investing. Neither they nor other investors want general advice seemingly ripped from the pages of a Wealth Management 101 textbook.
For example, nearly 90% of mid-high-net-worth investors with $10 million or more in personal wealth said the advice they got from their professionals was too generic.
“There’s an increased appetite for advice underpinned by tailored educational content and products that is highly customized to clients’ point-in-time needs and investment preferences,” the report said.
So while clients of financial advisors seek perspective on risk management and asset protection, they also want products that give them protection against future risks or that meet a specific and targeted need outside of asset growth, such as banking and insurance help. The report found that 79% of investors, including 85% of Generation X and 91% of millennial investors, expect their advisor to offer banking and insurance products.
Accenture posits that advisors who don’t change with the times might watch the children of their existing older clients take their inheritance money elsewhere after the parents pass away.
One of the report’s findings is that 58% of respondents expect to inherit a significant amount of money from their parents or an estate, and 26% of them said they plan to select a new advisor other than the one their parents work with to oversee all of their assets upon inheritance.
The Accenture study interviewed 1,000 wealth management consumers in the U.S. and Canada. These people work with a range of financial advisors including asset managers, banks, RIAs and robo-advisors.