As advisors rush to improve their digital offerings to better serve, educate and communicate with clients, the firms that service the clients with the most resources are the ones that are falling furthest behind.
Swiss research company MyPrivateBanking looked at 12 wealth management firms worldwide targeting clients with at least $30 million in investable assets, including Bessemer Trust, Atlantic Trust, Pictet, BNY Mellon Wealth Management, Citi Private Bank, Goldman Sachs Private Wealth Management, HSBC Private Bank, UBS Family Office, U.S. Trust and Northern Trust. The report, Digital offerings for UHNW clients - How wealth managers can win and engage the ultra-wealthy online, broke each firm’s technology into nine functions and graded each.
The study found few of the wealth management firms have even recognized a need to employ more developed digital tools, particularly when it came to client communications.
“While ultra-wealthy individuals are used to a personal and exclusive treatment in almost all circumstances... their financial manager, most likely one of their most expensive service providers, falls short,” said Emma Haffenden, senior analyst at MyPrivateBanking.
The category where firms did the best, on average, was in their “prominence of online services,” or how clear it was to clients that the firm had an online presence at all. Points were awarded for factors like having a permanent login for websites to offer clients quicker access, and having dedicated pages on their site with information about any online features available. The second-best technology effort these firms make is having a mobile app or website.
The researchers point out that the categories where the firms do well mostly serve to inform and reassure the client that the firm indeed has an online presence, but few of their online offerings add any value beyond branding and marketing.
Haffenden believes that the reluctance to embrace new digital tools to communicate with clients and allow them access to more personalized information may be based on outdated stereotypes about the rich and their skepticism of technology. “It is a myth that UHNW individuals don’t use technology. In fact, UHNWIs are some of the most prolific users and investors in technology and even social media has a 70 percent penetration into this segment.”
The study noted that although there was online material relating to intergenerational wealth transfer, few firms provided platforms or programs for clients on financial literacy or education around markets and investments. The category for digital contact and online client assistance was the least developed digital resource these firms had. According to MyPrivateBanking, none of the firms have private online communication tools or a social media channel of individual communication. That is a gap in the kinds of hyper-personalized service that UHNW clients demand, the report concluded.
“Any opportunity to communicate with an UHNW client or prospect should be considered unmissable,” said Haffenden. “It would be a fatal mistake of wealth managers serving UHNWs to think that ‘being digital’ equates to an online version of a brochure which one could find in print form. Currently, some websites are not much more advanced than this.”