Disrupt or be disrupted? That was the question my colleague Charles Ludden posed last week, but really, there is only one choice for incumbent wealth managers in today’s digital age: become a disruptor.

It’ll require more than just launching an app

The digital revolution is shaping an entirely new idea of what’s possible in wealth management. Think better client outcomes, the ability to engage prospective clients and build new value. Indeed, the potential benefits are compelling, but becoming a digital business is about much more than just digitizing operations or marketing.

Three steps to success

Based on our research and experience, we’ve identified three essential components of a potentially successful response to the digital challenge:

  • Empowerment: of both client and advisor, building trust by making clients better informed. Our Generation D research confirms that clients not only demand more data transparency, they also want to be able to validate the advice they receive. Full transparency starts with confirming that clients have access to all relevant information, including portfolio data, performance reporting, fee structures and other significant insights.
  • Engagement: to enable a more collaborative relationship between client and advisor. Digital tools make constructing, updating and monitoring the financial plan much easier. Putting these capabilities in the hands of clients will enable them to interact with their financial plan, model scenarios and stimulate returns. By leveraging analytics to gain a 360-degree view of the client, advisors can make more meaningful, customized recommendations.
  • Agility: of both mindset and business model, to adjust rapidly to the speed of change. An agile mindset will be critical to becoming a disruptor and responding with imagination.
Read the report.
Read the report.

The speed of digital disruption is now so rapid, wealth management firms will need to take steps quickly to empower clients by reinventing existing processes and inventing new ones, but not so fast that they go at it without a clear strategy. A strategy that is centered on better customer outcomes is critical. Then, seek to disrupt by creating new, outside-in business outcomes that create new value for clients. The time to start driving a new approach is now.

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