“[Millennials] are going to want their own personal preferences to be reflected in their portfolio; they aren’t going to want cookie-cutter offerings anymore.”
So, the biggest question is, when should financial advisors start targeting millennials? Approaching them now is costly, and it’s difficult to estimate the ROI on that investment. Will they choose startups dedicated to their demographic or just come into reliable ones as soon as their wealth grows? If not targeted now, perhaps it will turn out to be too late when they accumulate capital? These are the answers that wealth management companies are still going to have to find.
Infrastructure Is A Primary Trend
Today, investors, including millennials, value great designs that enhance the user experience (UX). The market has both performance-focused and UX-focused offerings. Seidman believes these two aren’t mutually exclusive, but it’s best when both focuses coexist in a product because even separately they will have great prospects for the market.
“There’s a different kind of client that’s interested in each use case. Some don’t have a preference. Some just want the lowest cost for advice. Some are motivated by a user experience. I think there’ll be room for firms that choose on both ends.”
No matter what one is going to build, the product will need infrastructure that is both secure and highly available. Companies that minimize resources on infrastructure maintenance will be able to invest more into building unique features and keeping the focus of their choice.
“You may not want to spend the money maintaining your own grid; running artificial intelligence or large Monte Carlo simulations are very expensive to do. So it makes a lot of sense to rely on inexpensive, commoditized infrastructure.”
The Bottom Line
Infrastructure is an essential part of any kind of product, regardless of its focus and/or demographics. Because providing accounts and data security is a number-one task for every WealthTech company, cheap and commoditized solutions will be moving toward that trend.
Interviewed by Vasyl Soloshchuk, CEO and co-owner at INSART, FinTech engineering company. Vasyl is also the author of WealthTech Club, which conducts research into Fortune and Startup Robo-advisor and Wealth Management companies in terms of the technology ecosystem.