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Agenerational shift is set to occur in
the workplace over the next 10 years
and will have a large impact on the
wealth management industry and how it
engages with its customers. According to the
Deloitte Dynamics of Superannuation report,
Generation Y (Gen Y) are set to make up 45
per cent of the workforce by 2023, which
is a large shift from the 19 per cent of the
workforce they represent today.
As there are stark differences in how Gen Y
want to engage with their money compared
to the baby boomer generation, the wealth
management industry will need to be aware of
the changing needs of their customers and be
willing to adapt their product and service offerings
to suit these needs.
WHERE GEN Y SEEK ADVICE AND
When it comes to financial advice, Gen Y are
bucking the trend in terms of how they would like
advice to be delivered. According to the KPMG
Banking on the future report, only five per cent
of Gen Y customers have a financial planner and
eighty four per cent do not feel the need to see
a financial planner. For this group, the traditional
face-to-face delivery model of financial advice is
seen as expensive, lacking in objectivity and only
available to those people who can afford the cost.
To this end, Gen Y are looking to their ‘trusted
advice’ circle to help with financial matters.
With a large portion seeking advice from family,
friends and their broader social network, they
are becoming more willing to share personal
information with their social networks in order to
receive advice and recommendations.
From a wealth management industry
perspective, this is both exciting and frightening.
It is exciting because it means advisers, super
funds and insurance companies can engage with
their members via channels such as social media,
where people connect with their social network.
It is also frightening because there is a risk that
people could be making poor financial decisions
based on advice from others, negatively impacting
their financial wellbeing in the long run.
DIGITAL BEHAVIOUR AND NEEDS
Gen Y are highly engaged with digital technology,
with their preference being to seek information
and advice online, utilising the convenience of
mobile and wearable devices where possible.
These mobile devices are becoming a central part
of their digital ‘eco-system’ as they are carried
everywhere, are often the first thing people look
at in the morning and allow people to consume
information when and how they want.
These devices are driving a behavioural change
in the consumption of information. A Lookout
Mobile Threat Report states that “63 per cent
of women and 73 per cent of men aged 18-34
say they don’t go an hour without checking their
phones”, while 54 per cent of people said they
check their mobile phones while lying in bed.
The report says people check phones “before
they go to sleep, after they wake up, even in the
middle of the night”.
This behaviour highlights the need for
organisations to consider where they engage with
their customers and what types of conversations
they want to have with them, as many Gen Y
consumers expect that companies will engage
with them through digital and mobile methods.
Wealth management companies will need to
start providing information that is relevant to
their customers, is given in real time, is contextual
and provides proactive recommendations to help
them make the best decision. Organisations will
also need to consider the entire digital eco-system
when trying to engage Gen Y audiences,
as they now expect experiences that are
integrated and seamless across platforms and
THE FUTURE OF ADVICE
According to the My Private Banking Robo-
Advisors Report 2014, the ‘robo-advice’ market
is expected to grow globally from $14 billion
in 2014 to $255 billion in 2019. The report
says these ‘robo-advisers’ are targeting young
affluent customers. Their proposition focuses on
providing a simple customer experience, increased
transparency of costs and investments, and
providing customer-centred design, which focuses
on winning in the areas where incumbents are the
Personal Capital is one example of a company
that is gaining market share in the United States
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