A Cisco-sponsored survey of 1,000 U.S. consumers with at least $500,000 in investable assets offers a good news/bad news scenario among the wealthy under-50 market: although this segment has $2.2 trillion in investable assets and is getting wealthier -- 67% of wealthy under-50s expect to receive a substantial gift or inheritance in the next 10 years -- these customers are fickle: 27% switched advisors in the past two years, versus 15 percent of all respondents. According to the research, technology played a significant role in their decision to make a change. (Another 30% of this segment are going it alone -- they don't consult with a financial adviser at all, the survey found, for reasons such as fees are too high, the investor can get better returns on his own, or the adviser doesn't have the customer's best interest at heart.)
The Cisco researchers asked further about which kinds of technology would spur customers to move their assets to a new advisor. "We asked about interest in using two-way videoconferencing with an advisor to connect with experts outside or inside the firm, such as accountants, lawyers and others who may need to be part of the decision-making process," says Robert Waitman, financial services consulting at Cisco. "Sixty-three percent of under-50s were interested or very interested in that scenario, 63% said they would move some of their assets for those capabilities."
Another scenario the survey posed was the ability to send short video messages to investors for timely recommendations. More than half (52%) of the under-50 investors were interested in getting such video messages, versus 23% of Baby Boomers and 15% of "Silvers." "There's a dramatic difference here, the under-50s want more frequent interactions with their adviser and are open to new technologies," Waitman notes.
The study also gauged under-50 wealthy customers' interest in using social networking tools for finance and investing. "Social networking is interesting for the under-50s," says Jorgen Ericsson, vice president and global lead, Cisco Internet Business Solutions Group, Financial Services Practice. "More than half (55%) have already used a social network to obtain finical advice and 66% are interested in joining social communities, in addition to one-on-one dialogues."
The biggest issue for these investors, Ericsson says, is that they feel there's not enough collaboration between financial advisers and themselves. "The primary thing they're looking for is more active and frequent interaction, particularly through video capabilities with which they can meet up with other experts that this bank has in their network," Ericsson says. "Customers are saying they're willing to shift to new players that offer these opportunities."
These customers also are interested in interacting with financial advisers via two-way video from home: 56% of the under-50 wealthy respondents expressed a desire for this. And 55% say they are interested in using a tablet PC to interact with their financial advisor or firm.