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Making things fast, simple and transparent important for Millennials: speaker


November 15, 2016   by Angela Stelmakowich


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Providers dealing with Millennials must have a clear value proposition and understand the importance of communicating in a way that is most comfortable for their clients, David Nugent, WealthSimple’s portfolio manager and chief compliance officer, suggested Monday during an event sponsored by Advocis, the Financial Advisors Association of Canada.

Phone calls to Millennials often go unanswered, but a text is likely to get a response, Nugent, whose company is a robo-advisor in the investment services space focusing on Millennials, said during his presentation, Appealing to Millennials in the Fintech Revolution.

These other forms of communication are “certainly overlooked when they talk about fintech and robo-advisors,” he argued.

“Communication lines can be wide open when you start to look at some of these other forms of communication,” Nugent pointed out. “I think it’s a huge piece that a lot of people need to start to embrace in order to scale their own business and make their time more effective and efficient,” he said.

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“How do you communicate with Millennials in an efficient way that they enjoy, because it’s all about the client experience,” Nugent told attendees. “It can’t be a long time, it has to be simple and, at the end of the day, if that can’t be achieved within a very, very short period of time, you might as well not pay any attention to that market.”

With Millennials, Nugent said it is important to create a digital experience, but to also understand interactions need not be face to face or even voice to voice all the time.

Millennials are “impatient, they want things immediately, they want that instant gratification,” and they want to do things at any hour of the day, Nugent pointed out.

Client engagement is further enhanced if providers clearly understand and communicate their value proposition.

“The confidence of your conviction of your value prop is so important right now, especially as transparency becomes more and more in vogue and talked about,” Nugent argued.

In investment services, for example, there is everything from high-touch, full-service brokers to online brokers who, in large part, say clients can do most things on their own and, in return, have low fees, but little advice.

Clients “do want some sort of support, but it might not be on a full-service basis. So this is kind of where this new robo-advice is coming in,” Nugent suggested. “It’s all about how you simplify the value proposition,” he told attendees.

It is also important for providers to understand how technology can be employed to enhance their own businesses and, in turn, service to clients.

“You really do see a divide. You see the really good advisors who understand their value proposition, who they’re going after, look to embrace technology. And you’ve got the advisors who haven’t really, totally figured out what their value proposition is start to really look at this and say, ‘This is competition,’” Nugent said.

“I think the faster you can figure out your value proposition, the faster it will be to figure out what are the complementary technologies to help you actually deliver the service, in this case, to Millennials, but it could be for anyone,” he noted.

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At his firm, Nugent pointed out, one in three users log in every single day. “From the product standpoint, it’s fantastic. The amount of data we’re able to gather on clients and send them recommendations or prods along the way, is something that a human would have a very difficult time managing,” he suggested.

“We’re seeing all over the world this movement of transparency, cost, simplicity, but it’s coming from the regulators,” he reported to attendees.

Pointing out, however, that regulators have not proved the best marketers, “I think the robo space, as a whole, is really kind of driving that message home, but they’re doing it in a much more client-friendly way,” Nugent said.

For investment services, “I think that this is only the second or third inning of massive, massive transformation” in how such services are delivered.

Still, he added, “I don’t think it’s something to be scared about,” he emphasized. “Technology is fantastic to help enable humans, but technology is not at the point yet where it can basically replace humans altogether.”

Nugent further noted “pricing is a huge, huge things for Millennials. They do expect everything for free.” However, “I think pricing is all about, again, the value that you’re going to create and how to give it back,” he added.

“What robo-advisors are going to do is they’re going to disrupt the advisor who never talks to their client and who never does any sort of planning. We are monetizing the investment management piece of the practice. All of the other things, though, that advisors do to add value is really what needs to be at the forefront of your business going forward as the way that you’re going to succeed.”

Related: Financial services concerned standalone FinTechs a risk to their business, not capitalizing on blockchain: PwC