How to Attract the Young and Rich: Technology

A Cisco Systems report focuses on wealthy-under-50s.

stack of money


Financial services firms might have a $18 billion opportunity to snag the business of wealthy people under 50. According to Cisco Systems, the electronics and communications company, all it’s going to take is (surprise!) technology.

Self-serving though the report from Cisco may be, it makes some interesting points. The wealthy young (or middle-aged) are an important segment of growing importance to financial services firms. Not only will they be around longer, but they also stand to inherit even more money, and they’ve shown a tendency to switch financial advisers at a much higher rate than their older rich brethren.

Where the report becomes somewhat surprising, and suspicious, is where it claims that financial services firms need to invest more in their own technology in order to lure the wealthy-under-50s. Cisco says that when it surveyed the younger rich, it found that:

  • 63% are interested in having access to professionals via two-way high-definition video rooms.
  • 63% would consider moving assets to another firm to access two-way high-definition video to meet with multiple experts. The willingness of wealthy under-50s to move assets to access technology-enabled capabilities translates into a $18.6 billion revenue opportunity for North American financial services firms. When older investors are included, the figure jumps to $28.6 billion.
  • 52% would like to receive video messages relevant to their investments on their PC or mobile device.
  • 55% are interested in using a tablet PC to interact with their financial advisor or firm.

Is there any real reason why financial advice needs to come via high-definition video, for instance? Probably not. But it does stand to reason that if one financial services firm acquires unnecessary bells and whistles, investors might be lured by that firm, and a competitive domino effect could follow. (I’m thinking of how irked I was that Bank of America beat my bank to having scanned print-outs of deposited checks at ATMs–a technology I didn’t realize I cared about until a rival bank had it.) So while old-fashioned communications are no doubt sufficient for financial services firms to do their job, Cisco may very well be right in its claim that the wealthy young could be attracted to firms that give off a vibe of being from the future.

[Image: Flickr user Amagill]


About the author

David Zax is a contributing writer for Fast Company. His writing has appeared in many publications, including Smithsonian, Slate, Wired, and The Wall Street Journal