Millennials are growing up and are set to make up a large portion of the affluent market segment seeking out quality advice, but according to new research by Netwealth, this could be problematic for advice firms.
While 1.5 million Millennials control approximately $2.2 trillion in household wealth, they have grown up as digital natives and are looking to engage technologically apt advisers.
Namely, according to Netwealth, as many as 46.5 per cent of millennials look at their banking app or portal daily, while half view and manage their superannuation using a website or app at least monthly. Moreover, 43.1 per cent manage their investments using an online broking service at least monthly.
But more importantly, around half of the emerging affluent rank a firm’s digital offering in the three most important things when selecting a financial planning firm.
Commenting on the report’s findings, Matt Heine, Netwealth’s joint managing director, said the pandemic has highlighted the importance of digitising the adviser-client experience. But the onset of a new client type — the emerging affluent — has accelerated this journey.
“As digital natives, advice firms will need to double down their digital investment, but the pay-off could be hugely favourable, as the emerging affluent might be their future client base,” Mr Heine said.
To that end, Mr Heine stressed that a client experience has to be more than a Zoom meeting. Instead, client portals have been identified as the next frontier in customer engagement.
“The first trend we uncovered is the significance that client portals play in enhancing the overall customer experience. Delivering them via mobile app has the capacity to evolve the client-adviser relationship beyond in-person interactions,” Mr Heine said.
“They provide an always-available and omnipresent reminder of the adviser, evolving and supporting the relationship from a physical one to a hybrid digital one.”