Digital MarketingStrategiesCashing in on Online Financial Services

Cashing in on Online Financial Services

Improving Web-based wealth management, particularly for the senior population, will pay off for professional investment managers.

Spectrem Group reports that 41 percent of investors with more than $500,000 in investable assets would either move assets or directly pay a fee in order to receive Web-based consolidated wealth management services from their financial advisor. The study, conducted in April 2002 on behalf of Advent Software, Inc., estimates that there are 1.7 million high-net-worth investors in 19 million affluent households in the U.S. that are willing to move 48 percent of their professionally managed assets, valued at $550 billion, in order to receive such services.

“This research shows that there is a large opportunity for today’s professional investment managers to provide online wealth consolidation to a largely under-served group of high-net-worth investors. We expect that the demand for such a service is likely to continue increasing as the more technologically savvy baby boomer generation benefits from generational wealth transfer,” said Linda J. Jacobsen, director at Spectrem Group.

Spectrem’s 2001 research estimated that over 80 percent of high-net-worth individuals currently have Internet access, and the April 2002 figures reveal that 86 percent of high-net-worth individuals aged 60 and under that have Internet access use the Internet for financial activities, such as gathering market information and account management.

According to the study, high-net-worth investors showed a very strong interest in an online wealth consolidation service that could give them visibility into their overall wealth and access to comprehensive research, news and information. Almost three-quarters (72 percent) of investors aged 60 or under, and more than half (53 percent) over age 61 were interested in getting access to such a service.

Incidentally, it’s the senior population that experiences the most difficulty online, according to a Nielsen Norman Group study, with problems that range from readability to navigational issues. Usability tests conducted with 44 individuals, ranging in age from 65 to 80, indicate that surfing the Web is twice as hard for the 4.2 million people over the age of 65 online in the U.S. as it is for younger Web users.

“Given that most Web sites are produced by young people who probably take it for granted that all Web users have perfect vision and motor control, we weren’t surprised that the seniors had a tougher time with the tasks than the younger test participants,” says Jakob Nielsen, principal of the Nielsen Norman Group.

Improving the accessibility rate for the senior population would be in the best interest of financial service companies. The Media Audit revealed that nearly 33 percent of the 50-and-older group have annual incomes over $50,000 a year. Of the 56 percent who are still working, 8 percent are business owners, partners or corporate officers. Among those between the ages of 55 and 64, 31 percent have liquid assets (cash, stock) in excess of $100,000 and 15 percent have liquid assets in excess of $250,000.

“This group is of tremendous value to marketers of a variety of products and services because of their numbers and affluence,” said Bob Jordan, co-chairman of the research firm that produces The Media Audit. “The increasing numbers for the 50-plus group demonstrate the universal appeal of the Internet, and we expect that 38 percent access rate to continue to increase steadily during the next several years.”

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