A July 2022 Bain & Company report on wealth management points to the rise of younger investors and how their investing habits and portfolios might affect the advisory business going forward. Savvy advisors will see the value in making the right connections, since, as the report states, “From 2021 to 2030, we project a $90 trillion increase in liquid assets from all investors globally, with $40 trillion coming from individuals who have assets between $100,000 and $1 million.”1

Younger investors lived through the global financial crisis and witnessed the rise of robo-advisors. They often consider themselves self-directed investors, preferring to buy, sell or trade investments themselves using a multitude of tools available to them online. With one key exception–when investing gets complicated, next-gen investors seek out human advice.

Seize the opportunity to acquire new clients using new tools

As the report points out, younger investors do rely heavily on digital tools to direct their own investing decisions, yet they see distinct advantages to working with a human advisor in times of market uncertainty. The report cites the need for modern advisors to provide a service model that is both high-tech and high-touch. 

“Serving new customers effectively requires a delivery model that actively leverages digital tools and channels, with human interactions reserved for critical or complicated episodes.” 

~ In a New World: Time for Wealth Management Firms to Shift Course,
Bain & Company1

Clients need your expert guidance now more than ever

Robo-advisors rose to prominence in 2008 and have been considered a threat to traditional advisors ever since. Yet the Bain report, and others like it, point to a very different scenario–one in which technology and data support and empower real investment professionals to provide the best possible guidance to clients. 

A recent Vanguard Group survey reinforces this message. As reported in RIAIntel, “Researchers at financial giant Vanguard Group, which manages $8.1 trillion in assets, published a report this week affirming something that many wealth managers have been saying for years: Robo-advisors aren’t a threat to the human variety. In fact, investors working with human advisors want to stick with them, and investors using digital-only advisors would consider a switch.”2

Specifically, the Vanguard survey found that: 90% of human-advised clients say they would not consider switching to digital-only advisors, and 88% of robo-advised clients would consider switching to a human advisor in the future.3

Inspire confidence with data-driven investing advice

Instead of replacing humans, technology allows advisors to make smarter, data-driven investing decisions. Technology can provide visibility and a clear understanding of previously opaque assets in your client portfolios. And in market volatility, technology and data play an integral role in telling a complete story of wealth for clients who may be panicking about potential risks.

Take the time to walk anxious clients through their investments, be responsive to their questions and tailor your advice to their concerns. As investors increasingly turn to you for clarity, know that you can give them the guidance they need when they need it most. 

Addepar is a software and data platform that is purpose-built for professional wealth, investment and asset management firms to deliver outstanding results for their clients. We’re helping our clients unlock the power and possibility of more informed, data-driven investing and advice. Our platform was created to empower investment managers to make data-driven and more confident investment decisions, and to clearly see how assets are performing and where they might be exposed. Most recently, we’ve expanded our capabilities to include Navigator for scenario modeling and AdvisorPeak Trading & Rebalancing to address portfolio drift.

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  1. In a New World: Time for Wealth Management Firms to Shift Course. Bain. July 11, 2022. 

  2. A Vanguard Paper That Financial Advisors Will Love to Read, RIAIntel. March 3, 2022.

  3. Quantifying the investor’s view on the value of human and robo-advice. Vanguard Research. Feb. 2022.