Your new competition for wealth management clients can come from anywhere, according to marketing and tech maven April Rudin.
Having long been a tech geeky girl, I am always on the lookout for the latest technology trends. When I met Bill Gates in the 1980s, it was difficult to fathom that the IBM personal computer running DOS would not always be the dominant hardware, but, as we have seen, every piece of technology is merely a fad. I expect the iPad, the iPhone, etc., will eventually go the way of the IBM PC and be replaced by the next big thing.
But change is not news anymore; it is expected.
I am traveling in Asia now, having attended the Asian Financial Forum, the continent's largest financial services conference, and then to Shanghai to speak at a high-net-worth wealth management conference. One of the common themes is how competition in wealth management is going to continue to come from places we may not have expected.
While flying from Shanghai to Bangkok, I began reading about WeChat, the most popular messaging app in China. It had announced that it planned to add a wealth management product. With its captive audience of 400 million registered users and 272 million global active monthly users, WeChat has a large pool of potential customers to which it can promote its new financial services product.
With account size as small as 0.01 yuan (about 17 cents) WeChat users can now buy and sell money market funds that return higher yields that bank deposits. Four fund companies have signed on as partners, but this is just the beginning in terms of wealth management services that could be offered to addicted WeChat users. Its brand is familiar and trusted; the company will be extending that reputation and creating even more “stickiness” with this offering.
But this not news; this type of innovation is expected.
Alibaba, the rival to WeChat, introduced Yu'EBao, an investment service in June through its e-payment partner, Alipay. Yu'EBao has had huge growth with 49 million users as of this week. It is now the largest money market fund in China, according to China Daily. Its success has driven many Internet companies and fund companies to follow this lucrative path. Baidu, the Google of Asia, launched its wealth management product, Baifa, in October in partnership with China Asset Management in October.
So what is the news here? What should we pay attention to in Asia, given its digital dominance? Your new competition for wealth management clients can come from anywhere. In the United States, we have seen online wealth management introduce products and then look for users. This is a significant turn of events that we should pay attention to.
What's next? Will Google come out with a wealth management product and take advantage of its user base?
For those of you sitting on the social-media sidelines, maybe you ought to give it a second look.
