Now that we know the characteristics of Generation D investors and the ways in which firms and advisors can increase their value proposition with them, let’s take a deeper dive into how investors are using digital tools and which ones they turn to.

Fewer fees, lower transaction costs drive Gen D institutional switches

Our survey of 1,200 Gen D investors in Europe reveals that increasingly, digital tools are being used for high-value activities, such as financial planning. In fact:

  • More than a quarter—27 percent—of respondents indicated they have switched financial institutions to obtain a digital tool, service, channel or application that their current institution didn’t offer.
  • Of those who did indicate switching for digital tools, the largest motivator—59 percent—was to reduce costs of transactions and fees.
  • Half said they switched to get better access to accounts, while more than 30 percent of respondents indicated the change was to gain better access to an advisor.

Clearly, digital tools and services have become not just an integral part of the advisor value proposition, but in some cases, can drive advisor selection—however not all digital tools are viewed equally.

Investors rank the digital tools and services that are important to them

A large amount of digital tools and services are widely available and considered must-haves, but forward-looking tools are typically viewed as difference makers in institutional selection. Here’s what I mean:

Read the report.
Read the report.
  • Difference makers—financial planning tools, such as scenario analysis, future portfolio analysis and retirement planning, will drive decision.
  • Nice to have, but not critical—services such as market news, e-newsletters and customer seminars, are not essential, but could move up to difference makers.
  • Table stakes—personal financial management tools, such as remote deposit, account transfers and statements/reporting, may initiate the consideration for a particular firm.
  • Not required—Chat features, macroeconomic research and luxury produce research are niche “must-haves” despite having lower overall importance.

Consider this: between 60 and 70 percent of investors we surveyed are uninformed about what services their institution offers. Is this an opportunity for firms and advisors? You bet, especially among Millennials who show more interest in digital tools, service offerings and applications that the other generations. Other opportunities to engage Gen D investors include gamification and simulations—44 percent expressed interest in these do-it-yourself digital tools.

In short, digital service is an important component in the emerging value proposition—not just in the future of investing, but also the present. The digital investor expects more personalized service and options delivered efficiently, and now’s the time for firms and advisors to strike the right balance between automation and consultation.

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