After graduating from the University of Wisconsin-Madison, Patrick helped individuals with their insurance needs. Now in the FinTech world, Patrick is driven by his desire to help advisors adapt and profit from the ever-changing financial landscape.
Beyond the obvious benefits of delivering cutting-edge service to improve customer engagement and increase cost efficiency, personal financial management technology allows advisors to actively attract Millennials and legacy clients.
Personal financial management for Millennials
Personal financial management refers to an emerging class of technology that takes advantage of account aggregation. This aggregation allows advisors to accurately and efficiently engage a user on how to improve their financial well-being. There are three main reasons why Millennials demand personal financial management:
1. Forward thinking
Often, the hardest part of creating a budget is actually sticking to it. This is mainly due to the fact that when you develop a budget, you are thinking about the big picture and how every expense can add up to affect your long-term goal. This mindset does not always stick around, however, when you are contemplating the seemingly small expenses.
Most people are aware that going out to eat is typically more expensive than making a meal at home, but it is very easy to justify the cost to yourself in the moment. The thought process of “it is just one meal” or “it is only a couple bucks” has proven detrimental to many Millennials. By utilizing personal financial management technology that the user can check in real time, clients can adjust their budget and spending habits more efficiently. This allows users to maintain budgets and reach saving goals.
In addition to small unnecessary expenses adding up, another major roadblock to achieving budgeting goals tends to be a perceived lack of time. The time it takes the user to figure out how he or she overspent every month and try to develop a strategy to save more is a huge turnoff to this young, fast-paced generation. This same generation, however, will gladly spend a few minutes here and there to check an application on their phone.
By placing personal financial management at their fingertips, the ability to actively monitor and maintain budget progress is much more convenient. Most users do not want to spend hours every month calculating and balancing a budget but are willing to spend a few minutes consistently throughout the month to monitor the progress.
3. Collaborative and individualized planning
This last point may come as a shock to some advisors, but Millennials typically do not want to simply trust that the experts are taking care of their finances. They want to be part of a collaborative process and be well-educated about their financial decisions. By allowing 24-hour access to their financial plans and budgets, this process feels much more personalized even if the interaction with the budget is moved to a mobile device. Personal financial management allows Millennials to focus on the short-term budgets on a daily basis and the advisor can use that information to plan for long-term goals and investments.
Personal financial management will continue to grow, and advisors that are not offering a client-centered, personalized approach to their financial planning could be missing out on a large portion of potential clients who are looking for this type of convenient technology.
To learn more about how account aggregation and personal financial management technology can help you grow your business, click here.