What You Need to Know
- Merrill data shows wealth level is a more accurate predictor of digital adoption by clients than age or sex.
- A study of ultra-high-net-worth clients finds most are digital adopters, the wirehouse says.
- Marketing and technology expert April Rudin says it's a mistake to target digital products and services purely at millennials.
Merrill Lynch’s success with the digital adoption of its products and services shows why advisors and financial services firms should avoid targeting one demographic segment, according to April Rudin, a financial services marketing strategist and CEO of The Rudin Group.
During a recent WealthTech Today podcast produced by the consultancy Ezra Group, she discussed the importance of a comment made by Kabir Sethi, managing director and head of digital wealth management at Merrill Lynch: The vast majority of Merrill clients with over $10 million in assets, 85%, have shown that they are the fastest and quickest investors when it comes to adopting digital offerings.
That “really flies in the face of what people are thinking” when it comes to who is adopting digital products and services the fastest, Rudin said.
A Merrill Lynch spokeswoman confirmed the data. “Today, 77% of Merrill clients are actively using our digital platforms for more of their needs,” the spokeswoman said by email. “Engagement levels are even higher among” the firm’s ultra-high-net-worth (UHNW) clients, she added, noting “85% of clients with $10M+ are digital adopters.”
It’s not only age that defines what an investor is looking for from their wealth manager, according to Rudin. “It’s really about behavior,” she said.
Similarly, “women are not all the same” either, so “having products oriented [just at] women doesn’t really work,” the fintech expert said.
Issues Tied to ‘Over-Segmentation’
When Rudin founded her firm nearly 13 years ago, there were “many old, tired wealth management brands — whether they’re bank brands, RIA brands, technology brands everyone in the ecosystem, a lot of really old brands — that didn’t resonate with younger investors,” she recalled.
It remains “relevant to appeal to a wide range of investors and buyers because certainly today, even tech vendors are selling to a younger-aged person, so the idea that your brand needs to resonate across multi generations is still really valid,” she explained.
However, “where I think this whole idea really went awry was in terms of over-segmentation — in other words, people thinking these products or these services are for millennials” only, Rudin said, pointing to robo-advisors, online trading, online portfolios and general digital products and services as examples.
“When you dig down into it, you can find out that it’s really not about millennials,” she explained, referring to the potential audience for digital products and services.
“Year after year, [Capgemini's World Wealth Report] produces statistics saying that the highest digital adoption is really among ultra-high-net-worth baby boomers,” Rudin noted.