What do wealth management clients want as the industry turns to digital?

By Gaia Lamperti

Increasingly, High Net Worth (HNW)  individuals are drifting away from traditional wealth managers and into the arms of digital-first firms. According to the 2021 EY Global Wealth Report 28% of HNW clients plan to switch wealth managers over the next three years moving their money over to FinTech platforms, which enjoyed a generous boost over the 2020 lockdown period and are anticipated to see a whooping 74% increase in usage.

This means that for the industry it has become key to invest in a digital-first proposition to retain clients. On top of this, their client pool has become more and more diverse and aware of social and environmental issues, so wealth managers need to really understand what their clients are looking for, what they value most and how best to connect with them.

In this context, what are some of the most recent trends among wealth management clients? IBS Intelligence’s research team has identified 3 major ones:

• Mobile apps will become the primary engagement mode for wealth management customers
• The interest in face-to-face meetings will increase due to the expected relaxation of social distancing norms
• Investors continue to exhibit interest in a blend of virtual and physical connect

Our proprietary data shows that 75% of surveyed investors prefer to engage with their wealth managers via app, a figure expected to hit 89% in the next 2 years. Phone calls and virtual meetings still rank high, with these channels being used by 53% and 58% of the clients. Meetings and emails are only used in 30% of cases but a renewed preference to engaging in person is expected in 2 years’ time (47%).  Messaging apps as a channel for communication never really took off in this context, with only 20% using them now and even less expected in the future.

The digitisation of financial services has created a need for a workforce skilled in technology, and the wealth management vertical is no different. This is benefitting clients and advisors alike. The formers, who now want to interact with their advisors anytime, anywhere and on any device or channel; expect access to as much information as possible and as quickly as possible – and apps are perfect for this purpose. For advisors, it is more about enabling them to “do more with less” and ultimately “freeing” them from their desktops. They can now simply see every transaction within a client’s portfolio and generate all disclosure forms, encouraging a proactive conversation with the client. Advisors expect to be contactable via digital platforms that encourage self-reporting, as well as interactive UIs that allow an advisor to home in on a client’s portfolio.

The digital acceleration is due to continue in the evolution of the wealth management industry, which seeks to obtain the right balance between “high touch” and “high tech” wealth management. Clients may not necessarily recognise the technology, per se, but they do recognize an accessible, more digitally enabled and ubiquitous platform.

“As digital adoption surges, clients are benefiting from the investments made by wealth managers in recent years. A majority of clients not only think technology has made investing cheaper and more efficient (69%), but also that it has improved their investment decision making (57%),” says EY report. “Wealth providers can take valuable first steps towards providing flexible hybrid models that offer curated interactions by digitizing processes, aggregating data, and working with FinTechs to develop predictive analytics. The aim should be to create seamless digital experiences that are fully integrated with advisor-led channels. Underpinned by transparent data frameworks and enabled by technology, digital interactions should match the personalization of face-to-face contact. A deep understanding of client purpose and beliefs also can help firms to deliver more tailored, empathetic experiences and give clients a broader sense of fulfilment.”