This post is sponsored by SunGard
Chris Corrao is product manager for SunGard’s capital markets business and a recognized expert in delivering and designing innovative advisor and investor solutions. His strengths include delivering content-rich, best-in-class user experiences. Here, Mr. Corrao talks about millennials as a driver for business transformation in wealth management.
Question: How are some of the key trends, such as the demographic shift and regulatory reform, leading to a new industry paradigm?
Chris Corrao: I’m a Gen X-er who grew up using rotary phones, and if someone didn’t answer, then you would have to be patient and try again later. But the millennial generation is different. They require instantaneous access to information via their smartphones and communication via social networks. To reach members of this generation, you really have to be cognizant of what they need. Automation is an absolute must; mobility is a must; anytime, anywhere availability and access to information and tools are musts; and let’s not forget social media.
Another key trend has been the effect of regulation. Take brokerage processing: Compliance regulations have become overwhelmingly burdensome and strict. As a result, firms are turning to outside vendors to help ease the weight of managing data, reporting and communication with various regulators so they can focus on differentiating their offerings and providing more value to their clients.
Q: Let’s talk about the millennial generation as investors and the generational wealth transfer. Why is this a timely topic and what effect do you think it will have on financial advisors?
CC: There’s about $30 trillion in assets up for grabs in the wealth management industry. That’s all coming from generational wealth transfer to the millennials. During the next 30 years, about $1 trillion a year in wealth will move from one generation to the next.
Most of the future beneficiaries have never met with their parents’ advisors. In my case, if something were to happen [to my parents], I would know nothing about the relationship they had established with their advisor, their assets or estate planning, or tax planning. Also, millennials primary financial relationship is with their banks, which are already interacting with them through online, mobile and social media channels and therefore have a better chance of gleaning those assets from their parents’ advisors.
That means advisors need to not only start establishing relationships with beneficiaries, but also should be using the right tools to communicate with them and providing self-service tools that are meaningful to them. And broker-dealers are starting to notice that millennials don’t necessarily want to meet advisors, they want options and tools to educate themselves as well.
Q: What’s so different about this transfer? What do wealth management firms need to be thinking about?
CC: Technology is paramount. I am working on a project that is designed to completely transform the experience for both the financial advisor and the investor. A lot of advisors are “old school” — they like talking to clients. But the new generation of advisors is hooked on technology and information. You have to be able to include every possible data source. It has to be in real time, it needs to be extremely mobile, and the user experience has to be configurable and intuitive.
Most importantly, social media has to be a part of the experience: Single sign-ons for Facebook, Instagram, LinkedIn and sites where people can share information are a must. That’s where the market is headed: Millennials only want to talk to you when they need to, but they always want information.
Q: Millennials are affecting the industry in other ways, too. They’re the next generation of professionals. What should financial services firms be doing to attract talent?
CC: If you want to attract and retain millennial talent, technology has to be at the core of your business. Compensation is not number one anymore. You’ve got to give millennials flexible work arrangements, 24/7 content and best-in-class technology that allows them to service their clients effectively.
And how do you retain millennials? You’ll have to put the best-in-class technology in their hands and let them guide you. It can’t be what we think we should be building. Millennials believe in collaboration; thus, the technology has to be designed and implemented in a more collaborative and iterative manner, and must include the trading desk, the sales group, and the business as key stakeholders in the process — not developers developing in a vacuum.
Q: Finally, tell me about SunGard’s solutions and how they meet the challenges facing the industry.
CC: SunGard’s breadth of investor and advisor solutions extends across an impressive spectrum of business models. Whether it’s retail or institutional, traditional, discount or boutique processing requirements, our focus is on delivering scalable and reliable solutions for both the investor and the advisor. Starting in early 2016, SunGard will deliver a next-generation, tablet-based investor solution that captures all of the benefits of HTML5 to provide all types of users, including millennial investors, with the desired mobility that has become second nature to them. Additionally, we’re working on developing a completely revamped HTML 5 advisor solution that includes a full suite of workflow efficiencies, performance reporting, portfolio rebalancing, broad relationship-level views and actionable reports in an easy-to-use mobile format.