22 September 2021

How Wealth Firms Can Create Digital Delight Among Clients

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The upward drift of client expectations due to digital platforms is not a new trend, but results from two new global surveys show that living up to clients’ digital standards has become more important than ever.

In a recent global survey of 800 high-net-worth investors, FactSet Research found that a growing number of investors, regardless of their self-identified level of comfort with technology, are becoming increasingly comfortable with online activities like video calling, online banking, using digital signatures, and keeping up to date on business and current affairs through apps.

And in its 2021 Global Wealth Research Report, EY found that across the world, 51% of clients – including 78% of millennials – intend to make event greater use of digital tools in the future.

With the increased adoption of technology, wealth managers should be prepared to stay abreast with clients’ demands. As FactSet noted, some have already stumbled with high-profile reports of platform glitches, system outages, and duplicate trade errors.

Against the backdrop of growing use of digital tools, more than one in three clients in EY’s survey indicated that their relationship with their wealth managers has become less personal. The number was even higher among Canadian clients (42%), and even one third of clients who said they prefer advisor-led contact characterized their relationships as less personal.

FactSet’s findings suggest that HNW investors are broadly satisfied with using digital tools, however. Four tenths (42%), including client segments often taken to be behind the curve on digital adoption, said they’ve never encountered pain points when managing their wealth online.

Looking at the results by age, 18% of those under 35 years old, 35% of respondents between 35 and 54, and 52% of those 55 and over said they experienced no pain points. The same was true for 39% of digital phobics, 61% of digital laggards, 48% of digital followers, and 22% of early adopters.

To encourage and nurture these online interactions, FactSet said wealth managers should focus on using their communication tools with clients. The opportunity is particularly ripe among early adopters and younger investors, the firm noted; as likely digital natives, they are more open to testing out tools offered by their managers either on their own or in meetings with advisors.

“Our data shows Early Adopters are three times more likely to give their wealth manager’s digital offering top marks than Digital Phobics (34% vs. 10%, respectively),” FactSet said. “This points to heightened polarization among the most discerning client segments, as many will have sought out a best-in-class offering.”

Another probable driver of client satisfaction is better engagement with analytical tools. With quality information, clients will be more likely to grasp market events and their implications on portfolios, which elevates trust and confidence. Female investors who engage with fewer tools tend to report lower financial confidence than men, while investors who use analytical tools offered by their wealth managers frequently report higher confidence, including roughly half who say they feel very confident about their financial futures.

Wealth firms may also have an edge with respect to client data. According to EY, clients would be more willing to entrust their primary wealth manager with their personal data than banks, insurers, retailers, tech firms, media platform, and even their doctor – as long as they receive more relevant services and experiences in return.

“In addition, 41% of clients would share investment data from other financial providers, and nearly as many would disclose their interactions with those providers,” EY said, emphasizing the opportunity for wealth firms to develop fully integrated financial relationships through open finance protocols.

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