Prospecting In The Robo-Age

Are Tech-Savvy Millennials Advisor Friendly?

How digital prospecting pipelines create new a revenue source for wealth managers

by Mike Alexander and Ramprasad Sandilya

Mr. Alexander is president of wealth management at Broadridge Financial Solutions, and Mr. Sandilya is head of client solutions and business development. Visit

Next generation investors are discovering that growing their portfolios isn’t always easy. Many investors who entered financial markets over the past decade had their first experiences with a downturn last year. Today, facing inflationary headwinds, market volatility and fears of an economic recession, entire generations of investors are realizing that they might need some help. Surveys have shown significant increases in demand for professional advice during and after every major economic downturn since the 1990s.

This moment represents a huge opportunity for the wealth management industry, which has been trying to sell investors on the benefits of professional advice. However, even though investors might be more open to working with an advisor, independent and tech-savvy Millennials and Gen Zers still pose unique challenges to wealth managers. As these investors seek assistance, they will gravitate to advisors who have mastered the technology game. The wealth managers who win this business will be firms and advisors who leverage technology to create seamless service, an exceptional client experience, and personalized products and advice.

Robo Threat? Think Again

Too many financial advisors view self-directed trading platforms, robo-advisors and other DIY investing tools as a threat to their business, or stand-alone offerings intended only for a less-experienced and less affluent audience. Although it’s true that many of the millions of investors who entered financial markets over the past three years chose self-directed trading over traditional wealth advisors, it’s wrong to see the situation as a zero-sum game. Instead, wealth management firms and individual advisors should be embracing these channels to draw in new and younger clients. Then, wealth managers should use other technological innovations like digital experiences, data analytics, and artificial intelligence to deepen the relationships and transition the new clients into advisory engagements that improve outcomes for both investors and advisors.

The advisory services industry has historically ignored newer and less-wealthy investors due to relatively high costs of servicing and the inability to scale. The influx of new investors and the ongoing transfer of assets from the Baby Boomers to younger generations is forcing wealth managers to rethink that model. New digital technologies provide a cost-effective way to bring young investors into the fold.

Eventually, these clients will become candidates for a conversion to full-service coverage. That transition won’t happen overnight. However, advisors today have access to a rapidly expanding set of tools designed specifically to deepen relationships with clients. Wealth management fintech is one of the most dynamic markets in financial services. Firms and advisors can easily integrate diverse applications using cloud computing, software-as-a-service (SaaS), and APIs. Advisors can select the industry’s best-of-breed solutions to build a technology and service platform constructed to advance clients from self-service to full-service advisory relationships—step-by-step and over time, as clients’ account balances grow and life situations evolve.

The philosophy is simple: give your clients every tool they need to succeed on their own, while always embedding the option of easy and fast access to wealth coaching and advice.

Win Over Young Investors with Digital Service

The first step is to win investors over as enthusiastic clients of the automated services or hybrid DIY/advisory offerings. To do so, most wealth managers will have to upgrade digital service quality. Today’s investors are accustomed to the addictive blend of seamless service, transparency, choice, and instant gratification they receive from the likes of Amazon and Apple. They will accept nothing less from their wealth managers.

Wealth managers can improve service by adopting fintech solutions that make it simple and easy for clients to initiate a relationship with the firm, learn to invest at their own pace, and even trade play money before opening an account, funding it and making their first real trade. The smart combination of “high tech” and “high touch” enables firms to provide exceptional service to clients of differing assets, experience and goals, and to do so in an efficient and cost-effective manner. In the past, advisors spent substantial time processing transactions, gathering information and answering routine questions. Although these are important parts of the business, these tasks don’t necessarily move the needle in helping clients achieve individual goals.

Advisors today have access to tools like digitized self-service capabilities, “automated” advice platforms, digital marketing and education programs featuring video content, and applications that create customized portfolios. These innovations help meet investors’ day-to-day needs while enabling advisors to focus on face-to-face interactions that create real value and differentiate their firms from both other wealth managers and pure-play technology solutions.

Deepen Relationships with Personalization

Today’s investors are accustomed to the addictive blend of seamless service, transparency, choice, and instant gratification they receive from the likes of Amazon and Apple. They will accept nothing less from their wealth managers...

Technology solutions that handle routine tasks can also gather insights that improve the quality and value of advice. In every interaction with clients, emerging AI applications can evaluate behaviors, preferences and even values. The resulting data can be used to personalize communications, improve conversations (whether online, via social media or face to face), and tailor advice and product recommendations.

Technology allows a single advisor to provide a full portfolio of clients with personalized content and advice. Applications using data analytics, behavioral science and artificial intelligence can segment clients based on sophisticated metrics such as life stage, financial knowledge and experience, past product usage, and a host of others. Based on that categorization, advisors can use other applications to provide clients with education, insight and advice that applies directly to their own preferences, needs and goals. Young investors might get information about setting up a savings and retirement plan, building up a down payment for a house or saving for college.

This information can be delivered to clients through their media and channel of choice. In addition to traditional written materials, fintech solutions allow advisors to provide video content that resonates with younger investors. That content can be delivered online, via email, or through mobile apps that can gamify and make learning fun. Fintech solutions also provide ways for clients to connect with other investors. Integrating social media into a wealth management platform can appeal to the common desire among younger investors to share, collaborate and see what other investors like them are doing.

Personalization is not limited to service and communications. Investors have strong beliefs about how their money should be invested, and how their investments should impact the world. Direct indexing products and other solutions allow clients to build portfolios that reflect not only their investment philosophies, but also their values. Helping clients direct their assets into investments that help fight climate change or advance other environmental, social and governance goals can be a key step in building strong relationships with younger investors.

Embedded Options for Full-Service Advisory

In every interaction, the client should have the option of connecting with a wealth coach or advisor. Technology now enables firms to match investors with advisors that share their values, interests and goals. Wealth managers can tie invitations from suitable advisors to major life events and goals. Has the client with a growing family been viewing content about buying a home? Offer her the opportunity to learn more about plans for college education savings and the ins and outs of real estate investing in a brief video conversation with a wealth coach. Thanks to technology, these conversations can be dynamic and continuous, as opposed to the scheduled and more formal meetings that characterized past advisory relationships.

It’s a myth that younger investors scorn professional advice. To the contrary, research from Broadridge has shown repeatedly that young people place a high value on professional financial advice. In fact, when it comes to things like long-term planning, young investors are more likely than some of their older peers to turn to a full-service advisor.

Demand for advice will only grow as today’s younger generation ages and likely lives longer than previous generations. As they form families and accumulate assets, young investors will face financial decisions that are more complicated and have higher stakes. They will also have opportunities to access more sophisticated financial products, like real estate, private assets and other alternative investments that are gradually becoming more accessible to retail investors.

The Conversion Pays Off

At this stage, the wealth manager should be in a strong position to help the client navigate these challenges by converting to a full-service advisory relationship. Assuming the firm has delivered a high-quality experience, there should be an existing level of trust between the client and the wealth manager. Advisors should be able to build on that trust by demonstrating a deep understanding of the client’s situation and goals. Thanks again to new fintech solutions, that understanding will be informed by data collected from every interaction the client has had with the firm, both digital and in person. Equipped with unique insights into the client’s history, preferences, financial status, life situation, needs and objectives, the advisor can provide precisely tailored recommendations.

That compelling proposition should give the advisor an inside track to win higher-margin business from a pool of clients with growing account balances and expanding financial needs. The conversion of clients from the “minor league” DIY service to the big league of full-service advisory could provide wealth advisors with an invaluable resource in today’s hyper-competitive marketplace: a reliable source of profitable growth.