Financial advice in 2070: takeaways from NextWealth

Posted on: March 27th, 2024 by Morgan Arnold

Money Matters is part of The MHP Financial Services Pulse. 

A 10ft tall image of David Bowie might not be the first to spring to mind when talking about wealth management, but there it was, looking down over the hundreds of attendees at last week’s NextWealth Live annual conference.

‘Change agents’ was the dominant theme throughout the day at The Royal Institution, where we heard discussions on democratising advice, the balance of human connection over tech, managing generational change and the potential for life coaching to retain clients.

There was recognition of the need to not only adapt new models and practices, but to leverage marketing and PR to shout about this – and meet younger clients in different spaces.

A third new era of investment and wealth management

The talk that drew the most attention was from industry innovator Sandy Kaul from Franklin Templeton’s US base. She spoke about the move to designing portfolios that would be as much about delivering personal enrichment as financial; helping clients identify what they want out of life. The increase of gamification and ‘social’ investing fed into this, with the inevitable shift towards personally relevant stocks and tokenised collectibles (imagine a Taylor ‘Swift-ETF’ that covers concert tickets and merchandise as a portfolio benefit!).

She also spoke about the move to three-dimensional, hyper-personalised portfolios that span investments through to healthcare accounts, and the progression from chatbots to ‘act’ bots – holograms that could even take on the avatar of an individual adviser and lean on the data to offer guidance.

The next generation of advisers

This is where the industry is headed – an inevitability driven by client demands and a re-set in how younger generations view and access financial advice. But an ‘ageing’ financial advice industry is a challenge to this: around three quarters of IFAs plan to retire within the next decade. Someone made the point that the RDR was the death knell for advisers, with the scrapping of the commission structure that might enable younger advisers to get started (or attract them in the first place). Another argument was that licences to practice were becoming tougher to achieve and align with regulations, not market need. Once again, a reminder that it is the end-client who will ultimately steer this next era.

Connecting via communications

It was telling that the real focus on the role for marketing came from Paddy Earnshaw, Customer and Digital Director at B&Q. When 74% of customers get frustrated if content shared has nothing to do with them, and 48% spend more when their experience is personalised, he rightly emphasised the importance of connecting with customers and their communities.

That’s why wealth and investment managers, while it might be unchartered territory for some, need to be thinking more about their brand. Take inspiration from in and out of financial services, and companies that are already showing how they understand changing lifestyles. It can start small: a narrative that defines the ambition, a one-off sponsorship to test the waters, building to something longer-term that that stretches the business into different territory.

If you would like to discuss more about what these next steps should be, do get in touch on [email protected].