Skip navigation
computer-stock-data.jpg John Lamb/The Image Bank/Getty Images

Aite Group: Wealth Management Firms With Strong Digital Investments Pass the COVID-19 Test

North American firms are ahead of the curve, Aite says.

Digital capabilities at global wealth management firms have been a top performance driver during the COVID-19 pandemic, according to a new report by Aite Group. Firms with greater digital adoption are more equipped to support a remote working operation, function with fewer disruptions and overall perform better than firms that have not matched that investment in technology, the researchers found.

Aite observed more success among some U.S.-domiciled wealth management firms that have invested heavily in front- and back-office technologies and embraced digital client engagement. Most firms in Europe and Asia-Pacific did not fare so well, its report said.

“The clear lesson is that digital is no longer an ancillary side strategy or business line within wealth management,” write the report’s authors, Alois Pirker, Dennis Gallant and Wally Okby.

“It is firmwide, is strategic, and is an inseparable enabler of key performance indicators such as client communication volume, trading volume, investment performance, net flows, and outbound marketing activities.”

The Aite report is based on a survey of 31 wealth management firms across North America, Europe and the Asia-Pacific region in April and May 2020. Over half (54%) said the pandemic has negatively or very negatively impacted their performance. But among North American firms, only three said it impacted their business negatively. The analysts attribute that to their investments in digital platforms.

Further, half of the firms in North America indicated that remote working had a positive impact on their performance; no firms reported negative performance impacts.

Fifty-three percent of global wealth management firms reported a major increase in client demand for digital capabilities compared with a year ago.

“This is a remarkable shift given the wealth management industry’s traditional advisor-led business model and that wealth management firms have been complaining for years that their clients show low adoption of the digital tools available to them,” the authors said.

Nearly seven in 10 (68%) global firms cited a major increase in client communication levels compared with a year ago.

All but 7% of firms said they were satisfied with the client receptivity to digital engagement since COVID-19 began, with North America leading the way in satisfaction.

From a transaction perspective, two-thirds to three-quarters of firms saw stable business volume or a marginal increase. Except for the discretionary portfolio management categories, no North American firm saw a decrease in the transaction indicators. In fact, at least half of North American firms had major increases in retail trading.

While a higher business volume negatively impacted many firms, North America was the only region where firms reported a positive impact from higher business volume.

TAGS: Industry
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.