Appway: Firms must seize “opportunity of disloyalty”
Nearly half (49%) of wealth management clients under the age of 55 have or are thinking about switching, prompting software provider for the financial services industry Appway to tell the industry to “seize the opportunity of disloyalty”.
Despite wealth management being traditionally known to be a “sticky” industry, Appway’s research with Aon of 272 investors proves that it depends which demographic you’re looking at.
Whilst nearly half of under 55s have been branded ‘disloyal’, this is more than twice the percentage of those over the age of 67 who have switched or thought about switching wealth managers (23%).
It seems younger high-net-worth individuals (HNWIs) are being put off by high fees and weak investment performance according to Appway.
“Firms will need to think about why customers need to work with them in the first place,” says Appway in the report, finding that financial relationships are often driven by life events – with 63% identifying one specific milestone which triggered the need for professional guidance.
“While very diverse and emotionally-charged, most of these life events are usually foreseeable for the wealth management industry,” the report continues.
When more than half (56%) of these “trigger-events” happen before the age of 45, Appway says wealth managers “must be prepared to offer these younger investors the product and service mix they will be looking for, for an affordable fee”.