Nearly seven in 10 wealth managers believe a virtual platform is essential to enhancing the services they offer clients, up from 2016 when only a quarter of wealth managers responded the same way, according to a new report from Forbes Insights and Temenos.
“The Next Generation Wealth Managers: Advancing Services and Personalization with Technology” surveyed 305 high-level executives and 105 high-net-worth individuals in March 2019. Forty-eight percent of HNWIs considered digitization to be “essential” in the wealth management experience, an increase of 7% from the prior year. But clients' technology preferences should be balanced with sufficient experience and an understanding of clients’ needs, according to Gerd Leonhard, an advisor for wealth managers on how to accomplish successful shifts to digital.
“Wealthy individuals are willing to pay a steep premium for really smart and likable people, and they won’t walk away from that just because of technology,” he said in the report. “But they will not be satisfied with an organization full of great people who are completely behind on everything else.”
The survey also tracked how wealth managers view the importance of attracting mass affluent clients. Six out of 10 wealth managers said the mass affluent segment was “highly important” in their practice, and 43% of wealth managers believed utilizing technology was the best tool to attract mass affluent clients. However, 48% of managers said they felt challenged in matching the speed at which mass affluent investors wanted service, and 42% were concerned they would be uncertain when using platforms that mass affluent investors preferred for communication.
Digitization can also allow for a greater degree of personalization, and an overwhelming majority of wealth managers reported they were able to segment clients in such a way to improve personalization (though a third reported they could not do so to the degree they wanted). But wealth managers view digitization as essential—38% of respondents said senior management had to invest more of their budget in updating IT systems to help advisors keep up with the changes clients demanded.
“Technology from the client perspective should facilitate more active portfolio management, unlock new insights through predictive analytics and reveal opportunities that may exist in alternative investments,” said Pierre Bouquieaux, the product director of wealth at Temenos.