GlobalData: Wealth managers must accelerate the digitalization of their retirement services, according to GlobalData
The retirement and pension industry has been slow to digitally revolutionize, says GlobalData. The leading data and analytics firm notes that with simplicity and customer experience coming to the fore in the wealth management space via technology, the use of emerging technologies to manage retirement services will be well received by customers.
Sergel Woldemichael, Wealth Management Analyst at GlobalData, comments: “As the rest of the wealth management industry digitizes to attract the next generation of investors and expand access to more clients, the retirement space must also adapt. With more and more examples of actors adapting to this change, those who do not join will suffer consequences.”
In a digital world where people live on their smartphones, individuals expect seamless services and experiences how, when and where they want them. GlobalData’s 2021 Financial Services Consumer Survey shows that regardless of whether an investor is already retired, working full-time, or self-employed, a multi-channel communication experience is in demand. Therefore, pension providers should not overlook the need for personalization from a communication perspective. Customers want to be able to access the support they need when and where they need it. A lack of options would turn heads to other providers.
Woldemichael continues: “GlobalData’s survey reveals that more than half of retired investors globally favor traditional players to manage their investments, however, there is still a large portion who would prefer digital players and the customer experience they bring. So traditional players shouldn’t be resting on their laurels assuming that only millennials are keen on new digital wealth management services. generation is not so shy about technology.
Positively, there are examples of former guards and digital players developing retirement services despite many players not yet focusing on this. Charles Schwab offers a compelling multigenerational hybrid retirement service. UK digital pension provider Pension Bee has more than doubled assets under management (AUM) in the past year and robo-advisor Nutmeg offers both pension and wills services.
Woldemichael adds: “The need for transparent and personalized services is growing, and meeting this need is essential for longevity. This also applies to player retirement services. Wealth managers who are able to introduce attractive digital retirement services, including one focused on generations, will prevail.”
Providers should remember that advising clients at retirement age is just as important as ensuring that they also retain the wealth passed down or inherited by the next generation.
Woldemichael concludes: “Having a comprehensive service is essential, a service that satisfies the next generation, as well as the current generation. It also goes without saying that cheap services with positive returns will also keep customers at bay.”