FWR recently interview April Rudin, a strategist and thought leader in the wealth management sector, about industry trends and challenges.

If you work in North America’s wealth management industry, there is a fair chance that the name of April Rudin will be familiar. April, founder of the eponymous The Rudin Group, is a HNW wealth management, financial services, and digital marketing strategist. As the editors of this publication know, she relishes identifying innovative fintech and wealthtech market trends. A contributor to a variety of publications – including Family Wealth Report – April is also a judge for FWR’s annual awards program. She also serves on the Global Board of Directors - Hedge Fund Association, and is the Board of Advisors for NexChange – a financial services social network based in Hong Kong.

FWR recently interviewed April Rudin about her views on trends in the North American, and global, wealth management industries.

Q, Let's start off with a broad question: what would you say is your particular focus on the wealth management industry? What insights and ideas do you focus on when talking to wealth management firms and clients and what do you think makes you stand out from the crowd?

For me, wealth management is all about the clients. It’s incredible that in 2018 we’re still talking about how to be client-focused! But there are still gaps in the industry as wealth managers fail to translate their own expectations as high end consumers in society to the way they serve their clients. The digital aspect is a huge part of that. Very few wealth managers could tell me that they don’t use smartphones and apps every day in their personal lives, yet so many are reluctant to translate the digital aspect into their professional lives. Understanding the role of digital in personalizing the client experience and marketing a wealth management business isn’t hard, but it’s still a big differentiator in the market.

Q, There has been plenty of talk in recent years of how wealth managers should improve the client experience and differentiate themselves. Are we still at the stage where there is a lot of talk and no action or are you seeing genuine examples of progress? Are there cases you would draw attention to where client experience is being handled well? 

I see a lot more action now than I’ve seen over the past decade. Firms are starting to understand that clients don’t want a “one-size-fits-all approach,” and many are investing in outstanding projects around technology and client education. Of course, there are still gaps, and some firms are missing the mark in both keeping up with clients and understanding their needs. Take, for instance, the push to robo-advisors. That’s a great example of the wealth management industry using technology to streamline investing for their clients. But that doesn’t work for everyone. Sure, a lot of millennials want to use robo-advisors, but some don’t. Here’s where a gap still exists in understanding and meeting individual client needs. My own millennial son found himself directed to use a robo-advisor during his first visit to a financial advisor. But he had gone to a human advisor because he knew nothing about investments and wanted that personal guidance. There’s an opportunity missed right there!

Q, We know from talking to you down the years that you are a big advocate of modern communications technology. Let's be blunt: is this industry still stuck in the past in many cases? If so, how much can be blamed on culture, habits, or even fear of regulation? What can be done to improve how the industry uses technology?

So much can be done to improve how wealth managers use technology! Of course there are a variety of reasons regarding why the industry has been so slow to integrate technology. Fear of regulations always plays a role. But so does reliance on the ease of the status quo. Unfortunately that’s not going to serve anyone well in the long run. Technology can help automate marketing to reach more clients across more platforms. It can even help you find more wealth events to get facetime with prospects. Fintech can help free up advisors from the mundane tasks so that they can focus more on the clients. Likewise, it can create more efficient investing and trading. Wealth managers need to think of technology as a revenue generator, not an expense. Technology isn’t putting financial advisors out of a job. But it is changing the way they work. 

Q, How well do you think wealth managers understand the need to adapt how they communicate to get across to the younger generation? Do you think there is a problem with their holding cliched views about Millennials, Baby Boomers, etc?

There is 100 per cent a problem with approaching clients through stereotypes. It doesn’t help that the average age of financial advisors is 50, and the vast majority of them are white males. Approaching wealth management through the “old boys’ club” is going to have its shortcomings; wealth isn’t just held by white men anymore. Clients don’t want a “one size fits all” approach to their wealth management. We’ve talked about millennials and how they want digital access but with different levels of human interaction. The same goes for baby boomers. They use smartphones too, be it for work or their personal lives. They’re not all Luddites!  And half of them are women; some of whom want women advisors and some of whom don’t. The short answer is: financial advisors are still falling short of being available to meet different clients’ individual needs. Advisors need to do more “asking” than “telling” to communicate in ways that make sense.  

Q, Where do you think the wealth industry is at in terms of bringing in more diversity into its ranks of advisors? We see quite a lot of noise around this sort of issue - what do you think is happening in reality?

This is certainly a gap. Firms need to better represent their clients on a gender and an age front. As I just mentioned, it’s no secret that more than eight out of 10 financial advisors are men, and most are middle-aged. But women run about 50 per cent of client households. And there’s a statistic that 70 per cent of widows fire their financial advisors within a year, often because the advisor had little to no relationship with them and the widow wants a fresh start with someone of their own choosing. A financial advisor is serving an entire client family. After the patriarch passes away, the beneficiaries may be female and they may be the younger generation. Those two segments are increasingly wealth-holders in their own rights as well. There’s two segments that aren’t being catered to.

When it comes to the age gap, financial advisors aren’t tapping the opportunity to build their own business succession plans by bringing in fresh, young talent. These young people are going to be the ones who can carry on legacy clients, and identify with younger investors. Granted, this isn’t an easy feat. A lot of millennials and Gen-Xers are still feeling the burn from the financial crisis and are shying away from traditional financial jobs. We need to do more to encourage people in this direction starting at a young age. 

Q, What is your opinion of how well/badly wealth management firms market themselves? Do you see excessive focus on particular client segments and influence channels at the expense of others?

This goes right back to our discussion about technology and diversification. One wealth management survey found that well more than half of high net worth individuals expect their future wealth-management relationship to be digital, and two-thirds said that they would replace their current firm if it wasn’t skilled at digital outreach through integrated channels. Financial advisors can’t rely on one marketing channel. They need to reach multiple different types of clients through many platforms, be it social media, thought leadership insights and blogs or other platforms. Wealth management firms need to market themselves as technologically savvy, as well as capable of meeting different clients’ needs. Clients today are attracted by more than just annual returns. 

Q, If there is one thing you would like most to see change in the North American wealth management industry in coming years, what would that be (culture, people, business model, other)?

Diversification! I’d love to see more diversity in the age, gender and race of financial advisors. With that, clients can only benefit! Initiatives, such as Envestnet Institute on Campus, are starting to make inroads on college campuses to show students the opportunities in pursuing a career in wealth management. Hopefully the pay-off will be a diverse set of young people ready to work with the next generation of clients, not scared away from Wall Street because of Bernie Madoff-like reputations. It’s a theme we keep returning to, but clients need options to personalize their wealth management experience. The key to that happening is by having a diverse set of financial advisors with a variety of backgrounds, demographics and techniques for them to choose from. 

Q, Do you think the industry could learn more from other sectors of the economy in terms of the areas you specialize in, and if so, any examples that are particularly illuminating?

Culture is really important both for attracting new hires and clients. Culture is what keeps clients and advisor teams at a firm for the long run. Silicon Valley tech companies are the first that come to mind for a lot of people thinking about dream jobs, and not just because of their cutting-edge technology. Yes, many have their own flaws with diversification, but there’s still a lot wealth managers can learn from these young companies. For starters, these are entrepreneurs developing products and serving clients in a way they want to be served themselves. More wealth managers need to do that! Financial advisors need to be better about translating their personal wants as high-end clients into the services they offer. Personal insights, that come from a diversified group of advisors I will add, are exactly what more advisors need to prove they have. I attended a symposium late last year for a large investment manager. I was floored by the talks from the CEO and other speakers about how their personal lives, such as being a divorcee or a parent to a child with serious medical problems, impacted their relationships with clients by giving them empathy and insights. We need much more of this!

Q, Can you give us a bit of flavor about your own journey in the wealth management industry, background, etc? Are there are other points you want to make that are not covered here?

My own journey in the wealth management industry began more than 10 years ago, working for a family that is largely credited with inventing family office. It was there that I first realized the seismic opportunity where wealth, next-gen, and technology would meet-up and cause disruption.

I founded my firm, The Rudin Group, in 2008 to help address the wealth transfer from boomers to millennials and the new way that HNW would want to interact with their wealth managers, the impact of digital/technology, and, finally, help family offices, wealth management firms and those who work in HNW to “millenialize” old, tired wealth brands.