Wealth Management Trends and Challenges for 2015 and Beyond


Super informative article by Lauren Foster/Enterprising Investor on major demographic and technology trends that will play out in the near future.

Key demographic trends to watch out for: Women Holding the Purse Strings, Millennials soon making up half of the workforce, and Boomers Heading Into Retirement.

Key technology trends include: Social Media Inflection Points (e.g. high net wealth individuals will leave firms that don’t let them transact digitally!), Robo-Advisors (over $16B in assets) and Cyber (in)Security.

Very interesting detailed info below the break.

Trends in Demographics

1. Women Hold the Purse Strings

“The facts are amazing and people don’t know them. In the next five years the global income of women will grow from $13tn to $18tn — that is more than the GDP growth of China and India combined during the same period. By 2028, women will control 75% of discretionary spending around the world.” — Virginie Maisonneuve, head of equities at PIMCO, as quoted in “What Women Want Is Good Financial Advice.

Here are a few more facts to consider. Women:

2. Gen Y: Be There or Be Square

“We do things on our schedule, from our phones with the push of a button, and we absolutely demand affordability.” — Alexa von Tobel, Gen Y founder of LearnVest, as quoted in “The Recession Generation: How Millennials Are Changing Money Management Forever.”

There are a couple of things about millennials:

  • There are about 80 million of them currently living in the United States. By 2020, they will make up half of the US workforce, according to the 2014 Millennial Impact Report;
  • They don’t trust financial institutions.

A recent InvestmentNews research survey set out to learn the expectations of younger investors — the client of the future — as well as their adviser counterparts. The survey found that millennials:

  • Are after an array of services, such as cash-flow planning, financial plan development, and advice on retirement.
  • Expect those services to be increasingly delivered online.
  • Want more frequent contact with their advisers than their elders but heavily favor social media, text messaging, email, and video conferencing over phone and face-to-face meetings.

3. Kaboom! Boomers Head Into Retirement

“People are living longer and looking with a more critical eye at their retirement and whether they’ll have enough funds.” — Leo Kelly III, CEO of Kelly Wealth Management, as quoted in “Making Sure Retirement Savings Don’t Run Out.”

Trends in Technology

1. Social Media Inflection Point

“The digital experience does not start and finish with a fancy interactive website. [Clients] expect their wealth-management experience to be as good as, if not better, than the best that retail — such as Apple — has to offer.” — Sebastian Dovey, Scorpio Partnership, as quoted in “Wealth Management’s Biggest Losers.

The stakes are high: The World Wealth Report 2014 from Capgemini and RBC Wealth Management found that high-net-worth investors “are likely to leave firms that do not allow them to transact digitally,” while nearly two-thirds of clients with at least $1 million or more in investable assets expect to manage most or all of their wealth relationship digitally in five years and would consider leaving their current firm if a “rated channel experience” is not provided.

2. Robo-Advisers Are Here

“It is naive to think that the world of financial advisers would be untouched by accelerating technology trends. The only question for advisers is how they can get on the right side of these trends as opposed to be disrupted by them.” — Tadas Viskanta, founder and editor of the investment blog Abnormal Returns, as quoted inFinancial Advisers Need to Get ‘On the Right Side’ of the Robo-Adviser Trend.

3. Cyber (in)Security

“The frequency and sophistication of these attacks appears to be increasing. In light of this ongoing threat, FINRA continues to be concerned about the security of firms’ infrastructure and the safety and security of sensitive customer data.”Financial Industry Regulatory Authority (FINRA) letter, 2 January 2014.

  • In the United States, the Securities and Exchange Commission (SEC) and the FINRA have identified cybersecurity as a heightened risk.
  • According to a recent survey by the Investment Adviser Association, ACA Compliance Group, and Old Mutual Asset Management, three-quarters of respondents considered cybersecurity/data security/privacy to be an important compliance topic.
  • In December 2013, the Financial Times reported that “Cyber criminals are increasingly hacking into the systems of wealth managers in order to steal money from better-protected clearing banks, according to Kroll, the investigations agency.”
  • The Wall Street Journal noted recently that more advisors are insuring against cyber threats.


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