We’re excited to announce Tech it Up, an SS&C Advent podcast that covers financial services and financial technology topics including ESG investing, women in fintech, the new generation of investors, selling strategies, technology, and more. In each podcast episode, your hosts Sarah Johnson and Trent Berry from SS&C Advent bring you new ideas through our community of industry leaders and influencers to intrigue, inform and inspire you through casual and thought-provoking conversations.
While the podcast episodes deliver a wide range of fintech topics, the first few episodes all have one common theme: the new generation of investors and advisors. It’s been a prominent conversation for years and it's time to talk about it. Much like the Game of Thrones, “Winter is Coming” industry experts have been warning, “G2 is Coming”.
In the next ten years, 40% of advisors are estimated to retire. In the next 30-40 years, baby boomers will leave $30 trillion in assets to their heirs and organizations. What have advisors been doing to prepare for this change in weather? They’ve been attending events and panels like the DeVoe G2 Forum and Designing an Intentional Strategy for the Next Generation of Advisors, listening to industry influencers like April Rudin, and partnering with robust technology platforms.
A recent Black Diamond Wealth Platform whitepaper addressed the top question for advisors today, how do you differentiate your services and continue to compete in a world of free? Delivering new marketing strategies, taking advantage of complex opportunities, technology innovation, and creating certainty in times of volatility are vital. If these trends are ignored, “Advisors who don’t evolve may see themselves relegated to second-tier status—just look at what has happened in so many other industries disrupted by technology such as taxis, travel, video, music, and retail.”
There’s no denying the pandemic of COVID-19 advanced technology usage. Marketing to new investors and retaining the old no longer takes two different marketing and communication approaches. Times have changed, and current clients jumped on board with the new generation of digital. During an upcoming podcast episode "Marketing to New Investors & Retaining the Old", April Rudin, Founder and CEO of The Rudin Group, suggests firms should adjust their marketing strategy every two years. She continued by adding that you can no longer only focus on the company brand. You now need to brand yourself and your employees from professional headshots to social media platforms.
While the marketing approach might stay the same, Matt McGowan, Director of Channel Alliances at Riskalyze, suggests the individual investment approach should be different in his podcast episode "G1 vs G2 Advisors Selling Strategies and Technology". In 2015, data suggested 66% of children fire their parents’ financial advisors after receiving their inheritance. One would assume this percentage has only increased. The children of baby boomer clients are likely to be different from their parents when it comes to risk, goals, and values. McGowan says advisors should adapt their investment and communication approaches when working with G2 investors. For example, millennial investors, instead of striving for one long retirement, might want several mini-retirements throughout their lives. Additionally, firms should be marketing to G2 advisors. If 40% of financial advisors retire in ten years, new advisors have the advantage. Rudin says firms need to put their best foot forward when creating their website and training programs. Your website is your storefront, you want the vibe and atmosphere to reflect your audience.
As imperative as marketing and communication strategies are to a firm's success, firms must be taking advantage of complex opportunities such as ESG. With no official standards, ESG factors are historically not included in financial analysis. However, investment managers are rapidly adopting ways to factor ESG into their decisions, not only to better align investors’ goals with their values but also to help overall investment performance. In podcast episode "U.S. Wealth Advisors ESG Investing: New Investors are Walking the Walk," Zachary Dan, CEO of Act Analytics, and Elgin Chau, Head of ESG Ratings of Act Analytics, are helping advisors do just that. In their previous careers, they saw advisors struggle with opaque ESG data. As Elgin put it, you didn’t know if the rating provider’s definition of ESG matched your own, so they decided to start Act Analytics. With Act Analytics’s technology, advisors and investors now have access to real-time ESG statistics where they can each verify their investments are aligned with their values.
The final differentiating factor: technology. Advisors using robust technology not only differentiate themselves from firms using outdated technology – they create certainty in times of volatility and uncertainty. Platforms with client-facing technology, like Black Diamond Wealth Platform’s Client Experience portal, allow investors to actively participate in their investment journey while regularly hearing from their advisors. McGowan has seen the use of their client and advisor interactive technology platforms skyrocket within the past year. To beat the 66% statistic, advisors need to adapt their firm’s technology, communicate via the client’s preferred channel, and learn what is important to these clients as individuals.
To hear more insights from McGowan, Dan, Chau, and Rudin’s episodes, visit our podcast page and start listening on-demand. Each episode will intrigue, inform and inspire you to prepare for the new generation of investors and advisors. Enjoy!