Wealth managers must accelerate the digitalization of pension services
The pension and retirement services industry has been slow to digitize. With simplicity and customer experience at the forefront of the wealth management space through technology, the use of emerging technologies to manage retirement services will be welcomed by customers.
by GlobalData Financial Services Consumer Survey 2021 indicates that while more than half of retired investors globally prefer traditional players to manage their investments, there is still a notable proportion who would favor digital players and the customer experience they bring to the table. Thus, traditional players should not rest on their laurels assuming that only millennials are keen on new digital wealth management services. Although they are not digital natives, the older generation is also not so shy about technology.
Moreover, 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 survey also shows that whether an investor is already retired, in a full-time job, or self-employed, a multi-channel communications 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.
Positively, there are examples of the old guard and new digital players developing retirement services. Charles Schwab offers a compelling multi-generational hybrid pension product, UK digital pension provider Pension Bee has more than doubled its assets under management in the past year, and robo-advisor Nutmeg offers both pension and will. So obviously players are starting to take note, but no longer need to follow to stay competitive.
Providers should remember, however, that advising clients of retirement age is just as important as ensuring that next-generation clients still retain the legacy passed down or inherited. Having a complete service is essential: a service that satisfies the next generation, as well as current wealth holders.
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 players adapting to this change, those who do not join will suffer the consequences. The need for transparent and personalized services is growing, and meeting this need is essential for longevity. This also applies to player pension services. Wealth managers who are able to introduce attractive digital retirement services, including one focused on generations, will prevail.
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