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The New Digital Thundering Herd

“Resistance to digital adoption has come from the financial advisory world rather than from the end user.”

April Rudin, Founder and CEO at The Rudin Group discusses digital adoption research from US giant, Merrill Lynch in a podcast with Wealth Tech Today. For those of you who do not know April, she is recognised by Onalytica as the #1 influencer in wealth management and runs her own top-ranked marketing consultancy for the financial services and wealth management sector.  We are proud to have her as our guest feature.

April highlights how Merrill Lynch has successfully driven digital adoption amongst clients by avoiding over-segmenting and making faulty assumptions about what each segment wants or needs. 

“it's a mistake to target digital products and services purely at millennials.“

“Everything they [Merrill Lynch] do is more about serving clients better, developing stickier relationships, and hyper personalizing as much as they can in their offerings to clients rather than going with a one size fits all. So, I think some firms are still stuck in that.”

Resistance to Digital Adoption

“Consider digital adoption. It seems like a fairly straightforward assumption that younger generations, and Millennials in particular, are more tech savvy. Working with that idea, you might build a digital tool with words and images that target only younger generations, unwittingly turning off any Baby Boomers who might use it because they’d conclude, “This was not built for me.” You might also follow the conventional wisdom that women prefer high-touch interactions and are less likely to use a do-it-yourself, online tool. The evidence doesn’t bear these assumptions out,

Some 85% of Merrill Lynch’s clients in its $10 million plus cohort are the strongest digital adopters.

“Merrill Lynch discovered its customer engagement with digital tools was more closely correlated to wealth levels, not age or gender. The firm found that high-net-worth investors were avid users of technology, and 85 percent of their customers with more than $10 million in assets were the first and quickest adopters of new digital offerings.”

“It took a pandemic to drive digital adoption and for firms to get over their security concerns and really just embrace it because there was no other alternative. I think now that we’ve taken this big strong leap to digital I don’t think there’s ever going to be any going back.”

We often hear advice to avoid herd mentality, but when it comes to Merrill Lynch’s approach to technology and wealth management, it’s time to follow the thundering herd.

The New Digital Thundering Herd - High Net Worth Baby Boomers

Digital adoption highest among UHNW baby boomers.

Kabir Sethi, head of digital wealth management for Merrill Lynch, says that digital adoption has been closely correlated with the amount of assets the clients have with the firm. Both post and pre-Covid-19, digital adoption was highest among ultra-high-net-worth baby boomers, defying the misconceptions that millennials are leading the demand for digital options.

It may also come as a surprise that the age ‘gap’ in digital isn’t that much of a gap. “This is one of those myths where younger people use apps and older people don’t,” says Sethi. “It doesn’t really play out like that. If I showed you the chart across the age groups in digital adoption, it’s a lot flatter than you would expect.”

“Clients do like using the apps and websites to check their balances or trade. But this is not just about giving them their own power. “There’s an increasing appetite for collaboration.”

A much easier experience

“Investors like having the option of walking through their portfolio with their advisor to get real time feedback. It’s just a much easier experience, and, frankly, a lot more secure. With the help of digital options, there’s no need for regular conference room meetings. Clients can provide feedback more quickly. That creates a more open, collaborative relationship between the investor and advisor that may not have been possible in the past. Who wouldn’t want that?”

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Launching your app to your clients

Imagine the cost savings to your business if 85% of your client base adopt technology to enable digital delivery and signature of all the paperwork for your client reviews, top-ups and new business.

At moneyinfo, we have clients achieving close to 100% adoption across their client base enabling them to re-engineer their everyday businesses processes through their own branded app.

To find out more please click here to book a demonstration.

April Rudin’s full article on Forbes can be accessed here.