How to Service the Mass Affluent while Remaining Profitable

Financial firms are faced with the challenge of not only targeting top-tier wealth, but also capturing the masses in order to remain profitable. The mass affluent segment (comprising individuals having US$100,000 to US$1 million of investable assets) owns over 42% of global wealth, making this segment responsible for a majority of the world’s investable assets as only 41% are owned by high-net worth investors (individuals with investable assets of US$1 million to US$30 million), according to the Credit Suisse Global Wealth Databook. There is a divide between these two groups, as high-net worth investors find value in the traditional relationship with their banks and brokerages while the tech-savvy masses still desire quality, high touch service, but delivered digitally.

Is it possible for firms to service both groups through personal touch branches and a powerful digital channel, while remaining profitable? Technology solutions are playing an increasingly vital role in this balancing act of traditional, client/advisor relationships, alongside the evolving needs of customer service and robust self-directed capabilities.

The desire for quality customer service has far from abated. While the mass affluent group is rapidly adopting more self-service options, investors of all types still want someone to answer the phone when they call – and for that person to be able to field their request quickly. Customer service representatives are no longer just assisting with the basics and the requests coming in are much more advanced. Multi-channel adoption—now incorporating social, mobile, and online touch points, in addition to existing branches and call centers—has become the norm alongside anywhere, anytime access. By utilizing a third-party technology platform to enhance these channels and meet the growing demand, wealth management firms can reallocate resources to meet the needs of more complex requests.

According to Aite Group’s survey earlier this year, more than 40% of U.S. financial advisors are planning on creating more self-service tools and expanding the type of advice and services offered in order to appeal to the Gen X/Y segments. In order to remain competitive, full-service wealth management firms’ digital tools must meet the digital appetite of these investors while still providing value through the advisors’ expertise. Technology solutions are key in this regard, as advancements in client reporting, flexible interfaces and data-driven analyses create a value-added client/advisor relationship.

Self-directed investors are empowering themselves and want to leverage intelligent insights and crowd-sourced analytics into their investment decisions. Traditionally, financial institutions have reserved performance reporting for institutional and high-net-worth clients due to the high costs and complex data processing requirements associated with satisfying a broader client base. Leveraging a third-party provider which can offer a scalable system efficiently will minimize reporting costs and give the ever-growing self-directed channel within the mass affluent the transparency and reporting capabilities that is expected amongs this influential group.

There has been an unprecedented surge of entrepreneurship within the wealth management industry, which has brought forward new business models and disruptive technology, providing the mass affluent with financial advice it has not had access to in the past through these digital channels. The firms which get ahead of the trend and offer these services will emerge on top and capture the mass affluent without being forced to shut all of its branch doors.

In the race for the mass affluent segment, has digital become the new normal? Join the conversation at our Bank Brokerage Executive Forum.

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