Wealth Management Client Experience: 3 Important Digital Trends To Watch

June 16, 2016 Teddy Griffin

wealth management client experience

Given my own interests and direct work with financial service providers, I regularly like to take a pulse on the industry and read about trends related to wealth management client experience.

Earlier this year, I read Aite Group's Wealth Management Top 10 Trends for 2016 and, more recently, I read an article analyzing research recently conducted by MyPrivateBanking comparing attitudes of UK and US investors towards robo-advisors.

The overall attitudes and regional differences are interesting and, I believe, indicate a larger shift in the landscape pertaining to client experience in wealth management. Below are a few key findings of the report and my perspective based on my own industry knowledge and interactions:

1) High-net-worth individuals use online investment tools more than other investors

I found this as the most interesting finding and, quite frankly, the most surprising. I’ve always assumed that the early adopters would fall into the demographic of younger generations as they’d be more comfortable with handing over their finances to a robot.

Also, high-net-worth investors are generally more high-touch clients requiring extra attention for complex tax situations and investing strategies, making me think they are less likely to readily adopt online tools. On the other hand, high-net-worth individuals are often more educated and highly educated people are more likely to adopt technology. 

What does this mean for the service providers? It means they should put differentiating services higher on the priority list and highlight exactly how they improve client experience in wealth management. Thus far, robo-advisors have nailed it on the head when it comes to ease-of-use (which is also detailed in the report) but they should also focus on other ways to attract younger and less affluent people, which can fuel their long-term success.

One such idea that has worked well for other emerging technologies are sign-up incentives. For example, they could offer investable dollar rewards for signing up, beyond a few months of free management. I’ll be interested to see how firms in the space step up their game in terms of attracting new users.

2) UK and US Investors are both open to robo-advice, but differ in their sensitivity to price

This particular finding was interesting to me because I simply didn’t know what to make of it. Both regions of investors are likely to use online tools but U.K. investors have a higher willingness to pay for robo-advice.

One thing is certain here; the need for automation will continue to be paramount as a cost reduction strategy, especially in the U.S. Belt tightening, which began with low-cost passive ETFs, will continue to take hold in wealth management services.

Pricing strategies for providers of automated investment tools will become increasingly competitive while firms vie for market share, and pricing will likely become the deciding factor for investors at sign-up time.

3) Automated advisory services will dominate the future of client experience in wealth management

It is similar to what I read in the Aite Group's Wealth Management Top 10 Trends for 2016. In short, innovating the digital client engagement strategy will be paramount to the industry’s future success.

This isn’t a surprise to anyone as the entire wealth management process gets more and more streamlined every day. From auto-rebalancing to automated advice and depositing, more automated processes are continuing to take shape. This includes automated client communication and portfolio reviews, like the ones we do at Narrative Science.

Automated narratives that clearly explain a portfolio’s composition, performance and objective provide transparency to investors and engage advisors’ (robo and traditional) clients while simultaneously freeing up their time to perform higher-value tasks, such as investment research.

The growing availability of suites of automated tools for end-to-end solutions and the wealth of opportunity is just beginning to be realized as advisors continue to improve their portfolio communications process.


Wealth Management Client Experience automation

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