The CIO tells this publication about how the firm caters for the Millennial market.

The chief investment officer and co-founder of Wealthify, an online investment service, has said large financial institutions will find it difficult to adapt to the technological demands of Millennials because of their “clunky” legacy systems.

As wealth starts to change hands, financial institutions will have to take notice of the generation known as Millennials. A recent study by Legg Mason, the US investment house, found that Millennials across the globe want to plan their finances using a smartphone rather than through more traditional routes. Larger firms have started to adapt to the needs and wants of Millennials, but it is rather costly, especially if firms have systems already in place.

Michelle Pearce, chief investment officer and co-founder of Wealthify, established in 2014, told this publication about how Millennials’ demand for financial technology will affect the wealth management sector.

“I think it will be difficult for them [large financial institutions], particularly, because a lot of them are built on legacy systems which are a bit clunky,” Pearce told this publication. “With every clunk comes a layer of cost, and they then have to try and put our new shiny tech on top, and it is a separate layer. Whereas I think if you are building a firm like we did recently from the ground up with the latest technology, it is slightly easier. It is quite often more secure because you haven’t got all these legacy sets and backdoors that are open to hackers because you built it with the best and most current security in mind.”

Wealthify, headquartered in Cardiff, Wales, is known as a robo-investor firm because it does not provide advice and uses a mix of smart technology and human intelligence to build personal investment plans and manage them for its clients.

Pearce went on to talk about what Millennials actually want and what Wealthify, which has 7,000 registered users with an average age of 35, does to try and meet customer needs.

“Our service is not exclusively for Millennials but we have designed around what Millennials want,” Pearce added. “We have designed following all the good principles of financial technology websites. Very quick sign up, works on an app, no paperwork, no face-to-face meetings. They don’t want to be fiddling around having to book in an hour, meeting someone across the other side of town. They don’t want to be bringing in photocopies of this and that, filling in big long forms, so we have made our sign up journey easy.”

The Wealthify CIO added: “The typical person spends around four hours a day on their phone, so for us it’s about knowing where our customers are. Not just in our app but also in other channels, through social media, reaching out to people on Twitter, Facebook and Instagram. We really are trying to tap in to where our audience are and what they actually like.”