It is important that firms start to embrace technology more because younger generations will be taking control of their parents’ wealth in the coming years, and those young people have embraced technology more than previous generations. Members of Generations Y and Z prefer digital technology as their primary form of communication over in-person discussions, video or phone calls. Fifty-six percent said they’d rather use digital communication for advice, while 59% prefer it for planning and 74% want it for service.
Generation X and baby boomers prefer in-person communication for most things except service, where 57% of Generation X and 45% of boomers said they prefer digital communication.
“The younger generations, that’s just their method of communication,” Martin said. “That does not mean they’re not going to have any face-to-face or any phone calls.”
One of the reasons the younger generations prefer digital contact is that in many cases they are working or raising children and their extra time is valuable, and things like an app allow them to stay on top of their finances quicker than a meeting with an advisor would.
Yet some generational habits could be permanent.
“Don’t assume as they get older that they’ll turn into their parents,” Martin said. “It’s really important to recognize that they likely will behave differently and operate differently, so you’ll have to meet them where they are.”
Technology and the use of apps is the natural evolution of the industry, he said. Advisors need to embrace it and find ways of incorporating it seamlessly into their business in a way that enhances the client experience, otherwise they may no longer have a business.
“I don’t think you have to be at the cutting edge on technology all the time, but you have to keep up with the Joneses,” Martin said. “If you are not engaging with technology and working with your customers through technology, you’re just going to fall behind because you just can’t keep up.”