{"id":26386,"date":"2020-07-30T15:46:32","date_gmt":"2020-07-30T13:46:32","guid":{"rendered":"https:\/\/www.intellias.com\/?p=26386"},"modified":"2024-07-23T14:50:50","modified_gmt":"2024-07-23T12:50:50","slug":"ai-in-wealth-management-how-to-adapt-to-new-customer-demands","status":"publish","type":"blog","link":"https:\/\/intellias.com\/ai-in-wealth-management-how-to-adapt-to-new-customer-demands\/","title":{"rendered":"AI in Wealth Management: How to Adapt to New Customer Demands"},"content":{"rendered":"

Your target audience is changing. Without mass personalization and digital-first offerings, traditional wealth management firms face a dire future. If you want your wealth management operations to remain profitable, you have to focus. You have to think about who your new target customer is, then figure out how to engage them. That\u2019s no easy exercise, but we\u2019ve already done some legwork for you.
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In the next five to ten years, roughly $30 trillion in financial and non-financial assets will be passed from baby boomers to their Millennial and Gen X children in the US alone.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\tCognitiveScale<\/span> <\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section><\/p>\n

With newly inherited wealth comes the responsibility to manage it. Most millennials are struggling to make sense of their cents. Only 44% answered<\/a> all the questions correctly in the 2018 TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), compared with 50% among all US adults.<\/p>\n

Moreover, according to a Credit Karma survey<\/a>, 46% of consumers find finances overwhelming (and let\u2019s be honest, sometimes boring). To some extent, this explains the rapid growth of robo-advising and the personal finance management software market<\/a>, which features on-demand advice<\/a> powered by chatbots<\/a>, gamification mechanisms<\/a>, and other delightful tools that engage and educate users<\/a> and help them feel less overwhelmed.<\/p>\n

And if you\u2019re thinking, \u201cour primary audience is older high-net-worth individuals, so we\u2019re safe,\u201d hold that thought.<\/p>\n

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39% of ultra-high-net-worth (UHNW) clients say they plan to switch or move money from a wealth management provider in the next three years.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\tEY,<\/span> Global Wealth Management Research Report<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n

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Source: EY, Global Wealth Management Research Report<\/a><\/em><\/p>\n

As the data above shows, millennials are leading the switching movement, followed by Gen X. What\u2019s even more curious is that people with little investment knowledge are more likely to switch wealth management services in the next three years compared to those with more investment knowledge (which brings us back to the previous point \u2014 educating your customers is key).<\/p>\n

Now you may be wondering why consumers switch wealth management providers in the first place.<\/b><\/p>\n

In most cases, the decision to change a wealth management provider is driven by a major life event<\/a><\/p>\n