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A Burning Platform for the Industry

I don’t have a long post for you today, as I am very much in the midst of the annual “busy period” (is it still a “period” when it will last for ~6 months in a single stretch?).

As all of us who follow wealth management are (should be?) aware, digital disruption is fundamentally altering the competitive dynamics of the industry.

For a recent white paper on “Wealth Management in the Digital Age” that I authored with a colleague of mine (and with the support of the team at Salesforce.com), I put together what I very immodestly find to be a compelling representation of the burning platform for firms to digitally transform their organizations. The figure below highlights just how much wealth manager income is at risk (left-side of chart) due to client loss from digital dissatisfaction, and then the follow-through to the firm as a whole (right-side of chart). The takeaway is that up to 56% of net income is at risk to just wealth client attrition due to digital dissatisfaction (and we have not even begun to discuss what happens if wealth managers leave for the same reason).

While these are extreme scenarios and very few firms will stand idly by while such client loss occurs, it nonetheless paints a clear picture of the stakes as digital disruption accelerates due to the much-discussed FinTech start-ups but also due to incumbent leaders who are “getting better at ‘getting’ innovation”!

So if you are reading this and are still on the fence about the importance of digital within the wealth management experience for clients, treat this as a call-to-action.

I am excited about some of the discussions and data I have been mulling over recently, and look forward to sharing more on the topic of digital and wealth management later in the year (and in more detail than this brief piece).


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