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Citi Ventures: Wealth Customer Needs in an Age of Anxiety

The wealth management market has never been so saturated. New players and technologies are democratizing access to products and driving down fees. But don’t count traditional wealth advisors out: by addressing customers’ anxieties, advising them through key life moments, and providing much-improved digital experiences, incumbents can effectively compete with fintechs and Big Tech.

Alex Sion, Managing Director and Head, D10X Consumer, Citi Ventures
Alex Sion, Managing Director and Head, D10X Consumer, Citi Ventures

In this guest-authored post for The Fintech Times, Alex Sion, Managing Director and Head of D10X Consumer, and Dan Blumberg, Entrepreneur-in-Residence, D10X Consumer, both of Citi Ventures, offer a solution to how traditional players can better meet the needs and demands of the digital consumer. 

Hip hop stars are explaining dollar-cost averaging in viral videos. Crypto exchanges are on the rise. New apps are making it fun for customers to buy stocks and crypto from their mobile phones. “Wealth Tech” startups, apps that allow retail customers to access sophisticated investing products at extremely low prices, are red-hot. And, as the decades-long asset march towards index funds and passive (or now “robo”) investing strategies continues, traditional wealth players are going free in order to compete with these challengers. In this environment, traditional wealth advisors can’t compete on products, price, or a promise to beat the market. So how can they compete?

Understanding the Needs of Wealth Customers

Over the past 18 months, Citi Ventures’ D10X programme has worked closely with teams across Citi to better understand the changing needs of wealth customers and develop a strategic vision for how incumbent banks can Win in Wealth.”

By speaking with hundreds of customers and advisors and conducting in-market experiments that reached millions of affluent Americans, D10X has identified several key underlying customers needs – many of which do play to the strengths of traditional wealth advisors. These include:

  • Anxiety Relief: Even before the pandemic started, D10X witnessed increasing anxiety about the high cost of living, education, and healthcare. Research showed that customers are eager for a 360° plan: in addition to helping with investments, customers want to make smarter decisions based on their goals, assets, liabilities, and spending. This creates an opportunity for wealth firms to connect with their clients on a more personal level by understanding their concerns and helping them make intelligent, long-term plans to guide their life decisions.
  • 360° View and Insights: Pulling together the 360° plan described above is often easier said than done. Many wealth customers and advisors say that the inability to simply see everything in one place hinders them from making smart decisions.To remedy this – and inexpensively acquire future customers at scale – some wealthtech startups have created free financial dashboards that provide a complete view and personalised insights. These dashboards can show if customers have, for example, a high concentration of US tech stock or whether the time is right to refinance their mortgage. However, these insights only identify a problem or opportunity, they don’t offer a holistic solution. The real power lies in providing customers with a plan to help them make sense of their finances and breathe easy, knowing that their wealth provider is keeping them on track.

  • Guidance, Financial Planning, and the Advisor as Coach: Once customers can see everything in one place, they need guidance to bring that plan to fruition. D10X sees a huge advantage for wealth firms that make planning a rewarding experience and has noticed a growing trend of advisors acting as “coaches” for their clients by helping with their healthcare, insurance, career choices, inter-generational estate planning, and more. To capitalise on this trend, advisors must be incentivised and supported with the right teams and technology to spend significant time with their clients (or potential clients) and their families to understand their needs.
  • Life and Liquidity Events: Wealth client needs often revolve around the “three Ds” – disability, divorce, and death – which can cause anxiety, complexity, and money movement. The team saw a 4-fold increase in user response (ad clicks, leads, etc.) when they pitched life/liquidity event-focused experiences instead of generic advice. Wealth providers that help their clients manage these big life events will thrive, and the firms that can engage these customers long before the events will win.
  • Family Matters: On top of managing their own life/liquidity events, modern wealth customers want their advisors to help them plan and allocate their assets on behalf of their entire families – prioritising needs such as their parents’ healthcare and their children’s education alongside their own. With a generational wealth transfer underway and younger generations struggling to build wealth in today’s economic climate, traditional advisors can differentiate themselves by acting as bankers to the family, not just one person.
  • AI and Automation: Fostering a deeper and more empathetic advisor-client relationship does not mean bypassing technology – rather, digital platforms can be powerful tools in an advisor’s arsenal. The team’s research revealed a strong customer desire for solutions that automate their finances, doing the hard math and leveraging AI to make tricky “if-this-then-that” decisions for them.Several digital challengers are already doing that, creating “self-driving money” services that optimise every spare dollar in a user’s account by automatically moving it to the “most appropriate accounts for [their] lifestyle and goals.” Meanwhile, other companies are investing in startups that are seeking to become “map apps for money,” while envisioning a future of “fully autonomous finance.”As Big Tech firms penetrate deeper into financial services, wealth incumbents may struggle to go toe-to-toe with Big Tech companies on AI and automation. However, they can differentiate themselves in ways that Big Tech can’t easily replicate by emphasising guidance, trust, and empathy, and by using technology to make processes easier and help customers feel empowered and smarter about their wealth.

A Future of Growth for Wealth Incumbents

Dan Blumberg, Entrepreneur-in-Residence, D10X Consumer, Citi Ventures
Dan Blumberg, Entrepreneur-in-Residence, D10X Consumer, Citi Ventures

Customer expectations for digital experiences are higher than ever in 2021, especially since the pandemic-driven shift to digital-only apps exposed the gaps in many traditional players’ in-person, branch-centric strategies. With more competition and increased product access, prices and switching costs are decreasing. To address this, incumbents need to adapt quickly to maintain wealth customer relationships and develop long-term strategies for engaging potential customers.

Fintech competitors know well that habit leads to opportunity. For incumbents, the key to future growth will be getting potential customers to develop a habit of turning to them for help – before that significant life event when they really need advice comes up. Through insightful guidance, wealth dashboards and smart digital tools, and empathetic human service focusing on customers’ needs over product offerings, incumbents can maintain and improve their position in wealth for years to come.


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