Technology has forever changed how we bank and invest, but it is not, argues Gunjan Kedia, the biggest disruptive force in financial services.
Profound demographic shifts taking place — more women choosing not to get married, the mass retirement of baby boomers — are even more disruptive, and they are fundamentally changing how financial services firms interact with clients and think about products and services, said Kedia, vice chairman for wealth management and investment services at U.S. Bancorp.
Case in point: Kedia’s group recently established a practice dedicated to advising small-business owners nearing retirement and looking for exit strategies. The practice includes ex-investment bankers and lawyers who have experience advising companies on mergers and acquisitions, along with psychologists, who are there to help business owners emotionally prepare to part with something they had spent much of their lives building.
“An enormous number of small businesses are run by sole proprietors now in their late 50s whose kids aren’t interested in taking over their business,” said Kedia. “This is the most frequent form of new wealth or liquidity that’s coming into the market ... and we’re personalizing service around that.”
Another disruptive force is the growing affluence of women.
Men have historically taken the lead in managing relationships with financial advisers, but that is changing as more women with highly successful careers are choosing not to marry. Since women tend to outlive their spouses and half of marriages end in divorce, there are now more women of marriageable age who are not married than are — a phenomenon that has enormous implications for how wealth managers deliver advice.
“Women think about wealth differently than men,” Kedia said. “Their investment risk profile can be different and their purpose for wealth is often different in the way they think about family obligations and philanthropy.”
Of course, technology is playing a significant role in how U.S. Bancorp tracks and reacts to these demographic shifts.
For example, the bank is actively using artificial intelligence to help predict life events or analyze behavior so that wealth managers can provide more targeted advice to clients.
U.S. Bank also has built a collaborative planning tool that allows advisers and clients to access accounts and build financial scenarios together, in real time, from different locations. And it recently rolled out a robo-advising tool that lets users build their own portfolios that rebalance as markets change.
“People’s attitudes towards wealth are all very different,” Kedia said. “We have to be astute observers of these trends [to] stay two steps ahead of what clients are wanting from us.”
