How gamification can attract on-line wealth management consumers to sign up

As firms like wealthfront.com attract assets in an ever more saturated market, the interesting question is, will they succeed in disrupting the incumbents?

How gamification can attract on-line wealth management

As firms like wealthfront.com attract assets in an ever more saturated market, the interesting question is, will they succeed in disrupting the incumbents?
fintech course   By FINTECH Books Contributors, Kris Grgurevic and John Stroughair Follow: @krisg1107 Let’s face it: there is now a profusion of on-line wealth management services, generically described as robo-advisors. As firms like wealthfront.com attract assets in an ever more saturated market, the interesting questions is, will they succeed in disrupting the incumbent wealth managers? We believe the answer, for now, is likely to be “no”, and that a second generation of robo-advisors will need to emerge before the incumbents are genuinely threatened. The current crop of robo-advisors does not really address the real customer pain points, but are rather designed around some cool, but dated, algorithms for portfolio selection. None of the robo-advisors seems to have developed a genuine “secret sauce” that attracts and locks in customers – especially not for those who are new to the idea of wealth management. We suspect that the successful robo-advisors are mostly attracting relatively sophisticated investors who understand and appreciate the algorithmic approach and the associated low costs. Also, we believe that the robo-advisors are generally addressing the easy part of the problem: if your customer has a several thousand euros which she wants to invest, what’s the best and cheapest portfolio for her? We would argue that most customers in this position, who would naturally gravitate to a robo-advisor, will already have a reasonable level of sophistication regarding investment. These clients will be able to replicate the offerings of the robo-advisors at significantly lower cost using an online discount brokerage. The real challenge is to bring wealth management to those customers who lack either existing wealth or investing savvy, or indeed both. But how do other platform providers convert “beginners” into customers? We believe that the solution lies in gamification: making investment both fun and cool will revolutionize wealth management and set the scene for disruption.