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The wealth industry has reached an inflection point in the wake of the pandemic, as investor attitudes, behaviors and expectations have changed dramatically, according to a study released this week by ThoughtLab Group, a thought leadership firm. 

“In our many years of conducting wealth management research, these investor shifts are the most dramatic seen,” Louis Celi, ThoughtLab’s founder and chief executive, said in a statement. “Investor shifts that would have taken years to play out are happening in months.” 

The study, which was completed in November, is based on a global survey of 2,325 investors across age and wealth levels, and a cross-regional survey of 500 wealth and asset management firms.

Adapting to New Expectations 

According to the study, wealth and asset management firms will need to shift from a product- to a client-centric approach in order to succeed in this marketplace, focusing on the person, not the demographic. 

That will require them to reimagine their client segmentation and go-to-market strategies, as well as their range of products, services and pricing models. 

Efforts are well underway. About two-thirds of providers plan to offer alternatives over the next two years in response to investor demand, and 4 in 10 will offer private placements or venture capital opportunities packaged for a wider range of clients. 

On the services side, more than half of firms plan to offer goals-based planning; as a result, they will also add more ancillary financial-related services. 

The ThoughtLab study further indicated that firms will need to shift their digital transformation programs into high gear, while finding the ideal calibration between a high-tech and high-touch approach. 

That balance is critical because contrary to the myth that millennials want to do things only digitally, young investors want personal contact when investing, just like older investors: 46% prefer face-to-face meetings, and 40% want phone calls. 

The research shows that firms that embrace digital transformation on average increase their productivity by 13.8%, their assets under management by 8.1% and their revenue by 7.7%. 

“Our study shows that wealth management providers will need to act now to address fast-changing investor expectations,” Celi said. “The winners in the next wealth management era will be those that think outside of traditional investor definitions and create a rich range of products and advisory services, democratized and priced for a wider group of investors.” 

See the gallery for six major investor trends that will transform the wealth industry.

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