Life stages in wealth management: Adapting to customer needs beyond advice

Co-authored by: Adam T. Scott Reddel , Bryant Fuller ,

Our world has changed, and people are seeking ways to adapt to its uncertainty. These evolving needs are impacting many layers of our day-to-day lives and our experiences as customers across industries—finance included.

Events over the last 15 years (a financial crisis, the era of post-truth, a pandemic, and now inflation and more) have reshaped how customers view and engage with financial institutions, more specifically for the purpose of this post, wealth management firms.

Today, when thinking about and dealing with wealth management, many customers are placing greater emphasis on personal factors such as mental health, introspection, purpose, values, identity and intrinsic motivation. This shift is resulting in a reassessment of priorities, prompting significant impact on the way customers interact with financial institutions. These lenses have surely influenced—if not changed—how wealth management firms are perceived today. To thrive in the future, firms will need to adapt and work to deeply understand their changing customers and the shifting expectations to offer more meaningful, personalized engagement.

Moving beyond advice to meet new expectations

To meet these evolving customer expectations, financial institutions need to go beyond traditional methods of giving advice. This is where our concept of “beyond advice” becomes relevant. It explores the need for firms to take on greater responsibility in providing personalized guidance and support through innovative tools and knowledge, which are tailored to each customer’s unique needs. This approach could not only lead to growth but also help to capture additional value.

In the wealth management of the past, expectations were often not attached to outcomes and not personalized for a specific customer’s needs. Today’s customers expect much more. To start this beyond advice journey, we’ll dive into specific insights from three different customer groups that we identified in some recent research. Those group’s behavioral characteristics provide more insights into each group’s wealth accumulation journey and the specific and unique needs those customers could have.

Three key customer groups of wealth accumulation

Our research looked at three customer behavioral groups in varying stages of wealth accumulation across different wealth tiers. By understanding how these groups evolve and change as they navigate life, we can gain insights into how wealth management firms could better serve them. The three groups we studied were:

1. Starting Journey – Typically anchored in Gen Z, this group is just beginning to accumulate wealth and is focused on building a strong financial foundation for their future. They are also keen to self-actualize and develop their individuality.
2. Major Life Event – This group covers Gen Y/Millennials and Gen X and is typically experiencing a significant life event such as marriage, starting a family, purchasing a home, or managing unexpected curveballs. They are seeking guidance on how to manage their finance during this important stage of life.
3. Legacy & Decumulation – This group is made up of more Gen X and Baby Boomers who are focused on preserving their wealth, piece of mind in their later years and passing it on to the next generation. They are also considering retirement and need guidance on how to manage their finance during this stage of life.?

Wealth accumulation levels across different life stages

Source: Accenture

How today's customer key themes rank in customer groups

In an earlier phase of our research, we had identified seven customer themes to highlight the shifting customer expectations in wealth management more specifically. We had featured those already in another blog post. In this post, I will focus on how the high-ranking themes vary among our three key customer groups and what this could mean for firms trying to engage with those customers.

Theme “Happy in the Stars”: This theme describes the customer with big dreams and a contingency plan that ensures a comfortable landing. The most important aspect of this customer’s financial health is ensuring a firm is there to help them meet their basic needs with a stress-free approach.

Across all three customer behavioral groups, “Happy in the Stars” ranked very high. In the “Starting Journey” and “Major Life Event” groups, this theme even claimed the top position.

We see these customers adhering to this theme looking for stable, secure paths through life given the uncertain nature of our world. These groups are less focused on big, aspirational goals, and more focused on security in their planning. For them, comfort and security are the priorities. But that’s not to say they avoid all risk. They still want excitement. These customers will embrace some opportunities while ensuring they can always land in a comfortable, secure place.?

Theme “Radically Transparent”: This theme captures the customer who expects a detailed explanation about their financial health and a clear plan. They need help to demystify the complexity. With that, we see education and insights as key factors to win this customer’s trust.?

For the “Legacy & Decumulation” group, “Happy in the Stars” ranked only second to “Radically Transparent.” Simply put, the years of life can bring complexity and these customers have more to lose. They want details and a clear plan. Because this customer group has less time and more priorities, they expect to have a strong understanding of their current situation—quickly and easily. As they prepare for the next life stage, they are engaged and ready to understand the impacts of today’s decisions on their future.

Theme “Thriving in the Chaos”: This customer is seeking support and guidance in understanding and balancing the unknowns. With the constant uncertainty of life, they want mitigations that improve security and stability.

We see this theme ranked highest for the “Starting Journey” and then middle of the deck for “Major Life Event” group. For the “Starting Journey” customers, there is a focus on mental health and prioritizing health as they learn to navigate the impacts challenges of an increasingly digital world. This group finds comfort in receiving support and help as they become more experienced.

On the other hand, this theme ranked lower with the “Legacy & Decumulation” customers, likely due to their prior experience and established comfort in their financial journey. They have experience in turbulent times. While they welcome additional support and security in adapting to volatility, they have likely been through similar situations before and are well-equipped to handle them.

While this is just a snapshot, understanding the highest-ranking themes across these customer groups could offer valuable insights into their mindsets, needs and goals, making it easier for firms to provide personalized and meaningful engagement. By recognizing the specific needs of their customers and tailoring their services and approaches accordingly, wealth management firms could better support customers as they navigate their financial journeys.

Top themes in wealth management’s key customer groups

Source: Accenture

So, what’s next? Here’s how to move forward.

Overall, we’re witnessing more industry players explore the use of customer knowledge and data insights to focus on hyper-personalization and more meaningful collaboration. For example, Bank of America’s digital personal finance tool, Life Plan, has attracted more than $55 billion in two-plus years.

The opportunity to go “beyond advice” exists for those firms willing to make moves and take advantage of this unique time as customers prioritize values and reconsider life choices. Today, wealth management firms can use customer knowledge and move with these first steps:

• Take a new look at product and experience creation pipeline: Use deep customer life context to start developing a growth portfolio for innovative new products, services and experiences that differentiated and drive acquisition, retention, open new revenue streams, and find cross/upsell opportunities.
• Focus on the future with growth enablers and operating model: Leverage key customer group insights as a tool to envision future experience and then audit existing tech stack and operating models to ensure customer experience is future ready.
• Be ready for data-driven conversations: Don’t just focus on technology in isolation. Instead, consider the needs of your customers and the business case in your planning. Use your knowledge of customers to equip your wealth managers for these conversations and to provide hyper-personalized service.

In this journey to deeply understand customers and offer more personalized guidance and engagement, wealth management firms could find new success paths. These key customers insights into each behavioral group’s wealth accumulation journey means firms can start making the right moves to meet their customers’ needs in more meaningful, collaborative ways. And that’s what we call moving beyond advice.?