The double-digit millionaire and the digital dragon

  • Posted on October 19, 2016

wealth management

As the global wealth landscape changes with the growth in the number of millionaires and billionaires, we ask what it takes to have a seat at the table and what wealth managers must do to develop a more sophisticated client service model.

The Double-Digit Millionaire

In recent months, JP Morgan Chase has gone public with their plans to raise the minimum asset-level to remain a private banking client from $5million to $10million. A dramatic increase, to be sure, but not altogether unexpected.

The shifting winds of wealth management have been moving us in this direction for some time. The binary old world of the ‘haves’ and the ‘have-nots’ has been replaced by a new, nuanced reality that recognizes many levels of wealth and the need for a more sophisticated model for managing clients.

For the typical private banking client there is an expectation that their banker will only manage a few similarly high-profile clients, but as we recognize the need for more levels of service, a client may find themselves moved to a more limited service with an advisor who handles upwards of a hundred clients. For JP Morgan, those not qualifying for full private banking will be moved to their Private Client Direct service.

JP Morgan is not alone. Several other firms have already started to ween their clients from the traditional services to more cost effective models and the remainder are sure to follow suit in the coming months. The simple truth is that the worldwide population of millionaires is growing at record levels: 300,000 new millionaires in 2015 for the US alone.

So what does it take to get those keys to the executive washroom? Be a double-digit millionaire.

Couple this new normal of net worth with the wave of GenX millionaires we are starting to have come up. Younger, faster, more tech savvy and moving at the speed of light. They don’t want to be hindered by phone calls and pleasantries. They want their data; now and on the screen their looking at, be it phone or tablet. And tools – give them tools and deliver them value. Be proactive – get there first and show them personalized content that is relevant to their world.

Welcome to world of the Digital Advisor.

The Digital Dragon

This matrix that delineates profiles of clients by wealth and user experience is a complex beast. It has to be fed a steady diet of operational automation or it will starve from lack of velocity. Wealth Managers will need to look to automate client onboarding, research and advisory, marketing and collateral, client connect and many of the common transactions or risk alienating a clientele who ride Uber, buy at Amazon and stream Netflix.

The beast must breathe as well; and this beast breathes data. For years I have worked with Asset and Wealth Managers who have suffered while trying to reach the holy grail of a golden copy or a single version of the truth. Well, now we have to get there in real-time and we have to build a robust repository that can handle the latency requirements for the future.

The Dragon must have teeth. Once we have the data and we have employed automation where we can, we must provide a seamless digital experience for the user. For clients, the ability to perform most tasks on their own by virtue of a single, simple and intuitive platform. For advisors, a platform that integrates their desktop experience with their client view and empowers them in the field; in front of their client.

Can the Dragon fly?

The Dragon is both an interesting and entertaining metaphor. Certainly it represents something that can be quite daunting but it also represents something very powerful, if it can be correctly harnessed. A successful digital strategy can provide a nuanced understanding of the client base, allowing a multi-layered approach that will allow firms to manage greater assets with a lower cost-to-serve.

Our clients are looking for a singular view of their wealth. By unifying this data, firms will also be able to utilize analytics and gain insights into client behavior while enabling managers to become more operationally efficient in areas such as risk and compliance.

We see from how digital adoption is transforming numerous industries that simply employing multiple channels is ‘table-stakes.’ Wealth Managers must seek to walk a true digital journey with their clients where we deliver the most relevant information to a customer on the device of their choosing at the most opportune time.

In this way, Avanade’s clients are driving a deeper understanding of the premium banking customer while employing automation and technology to enable growth in the client base and to deliver stronger, more loyal relationships.

Ask how Avanade Digital Advisors face the Dragon… every day.

Sanjay Marwaha

An excellent point, Rob. Certainly the message here is to embrace the terrifying prospect of the changing environment and look to exploit the technological tools at your disposal for Digital success. Slay the Digital Dragon !

October 25, 2016

Rob Hazelton

What about the most unique feature of the digital dragon?  The fire.  The fire represents the ability to protect as well as an ability to attack.  Wealth Managers play defense when in capital preservation mode but need to shift to the attack when data supports a transition.  With an understanding of what challenges the Wealth Manager faces each day, and an ability to leverage data and technology,  Avanade can be a valuable partner in a Wealth Manager's mission to beat the market.

October 20, 2016

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