How can Wealth Management firms thrive in the digital era?

How can Wealth Management firms thrive in the digital era?

Millennials (those born between 1980-1999) are gradually taking up a large proportion of the world’s Wealth Management clients. According to research conducted by Deloitte, this generation alone is expected to hold more than half of America’s wealth within the next 15 years (1).

External factors: The new generation of investors  

Unlike previous generations, millennials have 3 important characteristics that require Wealth Management (WM) businesses to change themselves to meet the needs of this new generation of investors:  

  • Having a certain understanding of finance: Millennials’ customers acquired financial knowledge from various sources such as early education, video tutorials, webinars, online courses, news, and online data.   
  • Lack of trust in financial advisors: In an EY survey, more than 50% of young investors have concerns about hidden costs when working with Wealth Management. This percentage is 30% higher compared to the general average (2), indicating the lack of confidence in financial institutions and asset management companies of the new generation. In addition, having a certain understanding of finance, these young investors will not rely solely on the assessment of a financial advisor or an asset management company, but rather collect information from other sources to make investment decisions.  
  • Relying on technology: As a generation born in the Internet era, millennials use technology in every daily activity, including financial management. About 80% of millennial customers think that technology not only makes investments cheaper and more efficient, but it also improves investment decision-making. This percentage is about 33% higher than the average of all customers (2) 

Internal factors: Competition from new firms  

Today, wealth management services are no longer provided only by large banks, but new banks (challenger banks), fintech and wealth tech enterprises, etc. also participate in the competition, making the market more competitive than ever. For example, in Asia, large wealth tech companies including WeInvest, Lufax, Kristal.AI, AutoWealth, or financial Internet companies such as AntGroup, WeChat Pay, Grab, Gojek, etc also participate in the asset management industry.  

The emergence of new businesses in the market, especially native Internet companies, results in a wide range of low-cost basic investment products and services provided to customers. This makes it difficult for traditional Wealth Management businesses to compete on the price. As a result, the ability to deliver superior customer experience is becoming the main driver of competition in the asset management industry.   

Recommendations for traditional Wealth Management businesses  

Digital transformation helps Wealth Management businesses increase benefits by 5.6% and productivity by over 8% compared to businesses that have not started Digital Transformation (3). For the top digital players in the industry, these numbers are even higher. Therefore, businesses that are behind in the technological competition are likely to generate lower profits compared to their adaptive counterparts.   

Traditional Wealth Management businesses tend to operate with a much more expensive model than small companies and startups. In order to compete with the flexible changes of fintech/wealth tech companies, here are some recommendations for traditional Wealth Management businesses to leverage their strengths and compete more effectively in the digital age.  

Building a clear operating strategy  

Despite high operating costs and slow changeability compared to new businesses, traditional Wealth Management companies have several strengths such as reputable brands, diversified products, and services, as well as capital resources. Therefore, Wealth Management businesses need to clearly define their operating strategy as well as pay attention to cooperating with new businesses and startups in building digital products and services while optimizing internal operations.  

This helps businesses improve their advantages as well as apply new technologies in order to build a solid position as well as a suitable brand image for young customers.  

Understanding and meeting customer needs  

As analyzed above, the main customer base of Wealth Management companies is gradually changing, leading to changing customer needs as well as the way to serve customers. In the future, asset management services need to be personalized and fine-tuned to suit different customers.  

One statistic shows that half of the customers are willing to pay more for personalized experiences in wealth management services. This represents an extremely valuable opportunity for Wealth Management to differentiate itself from other companies in the same field. To achieve this, data will play a pivotal role in helping businesses understand their customers better, as well as provide tailored, personalized experiences for each customer.  

With the advantage of a diverse customer base and a large number of partners, traditional asset managers need to continue to access and analyze internal and external data sources, social listening, artificial intelligence (AI), and machine learning to continuously expand the size and depth of customer and market data.  

Only then will Wealth Management businesses be able to make predictions that are closest to the market and provide the most practical advice to investors in the digital age.  

Doanh nghiệp wealth management thời đại số
Application of hybrid model: Technology and people  

One of the reasons why traditional Wealth Management businesses hesitate to apply technology is the fear that technology will completely change the consulting process and replace advisors with automated consulting technology (Robo-advisor). Robo-advisor helps provide quality financial services at a lower cost than human advisors thanks to the economies of scale.  

However, asset management is still a “human” industry, because many personal and emotional factors play a significant role in each client’s investment decision. Therefore, the trust of customers and the deep connection between investors and consultants will still be the core factors to help a reputable Wealth Management business succeed in any era.  

Next-generation asset advisors will need to be more responsive, empathetic, and digital-savvy. Besides, they also need to be versatile experts who can provide both real-time investment advice and investment plans to achieve lifelong goals.  

For Millennial investors grew up in the Internet age, who require 24/7 updates and personalized experiences, a hybrid consulting model including maximum automation of processes to increase the speed and quality of information processing, complex algorithms to support decision-making, and in-depth knowledge and long-term experience of the consultants will be the perfect model to serve this set of customers.  

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Digital Strategy 28/05/2024

Perspectives on traditional Wealth Management businesses in Vietnam  

As one of the strongest emerging digital economies in Asia, Vietnam has a rapid growth rate in cashless payments and a high rate of Internet usage thanks to the Government’s incentives for Digital Transformation and the continued growth of fintech companies. Besides, Vietnam is expected to witness one of the highest growth rates globally in the number of wealthy people.  

However, Vietnam banks tend to focus heavily on the retail sector, and the wealth management market is still in its infancy. This represents a clear gap in the Vietnamese market for a powerful, attractive, yet easy-to-use digital asset management service that targets young and emerging wealthy customers.  

Adapting to the global trend   

The general trends in Digital Transformation as well as providing personalized experiences for customers will be the focus of Vietnam’s Wealth Management industry in the coming years. Therefore, in order to rise and succeed, businesses need to be ready to change themselves and prepare to adapt to the general trends outlined above.   

Investing in IT platform  

The IT platform is the backbone of any business’s Digital Transformation. However, most of the companies that provide Asset Management services operate on a platform that was built many years ago. This platform is often inherited and connected with an integration layer to connect with a limited number of suppliers and partners.  

The Asset Management system of the future needs to be operated on an open, flexible platform, allowing the ecosystem of partners to be easily linked. With the continuous development of customer needs, IT systems need to ensure the ability to scale up quickly and flexibly.  

Connecting and building trust with customers  

Because Vietnamese investors often make basic investments and rarely use accompanying services/products, Wealth Management businesses need to regularly communicate and support customers to learn more about the wide range of products available and provide more personalized advice. By doing so, businesses can aim to become leaders in Digital Asset Management in Vietnam.  

In addition, businesses need to focus on changing their approach, from promoting their brand image to building trust with customers through perfect customer services, a good security environment, and providing algorithmic and data-driven advice, as well as clarification of service costs before customers decide to collaborate.  


(1) Deloitte. The digital wealth manager of the future  
(2) EY. 2021 Where will wealth take clients next?  
(3) Broadridge. 2021 Wealth and Asset Management 2021: Preparing for Transformative Change 


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