Wealth management clients are not as tech-phobic as the average wealth manager believes, concluded a study conducted by Scorpio Partnership and sponsored by FactSet.
When the research and analysis firm surveyed 877 UK- and US-based wealth management clients, it found that the appetite for digital interactions ran a spectrum.
The average survey respondent was 37 and described themselves as an early adopter or a technology follower and mirrored the technology adoption traits of millennials.
They’re interested in the digital experience, but it has to be engaging and worth something and not a reheated version of what they can get from a different channel, according to Tasha Vashisht, a senior manager at Scorpio Partners during a recent webinar.
“However, they have high expectations,” she said. “They probably will wait and try again if they have a disappointing experience.”
She cited an unnamed wealth manager that posted amount updates online and saw little uptake since the wealth manager already provided the same information through an already existing channel.
“Clients need a reason to log on,” said Vashisht.
Unfortunately for wealth managers, there is no “one size fits all” approach for which content will draw clients online.
What attracts the mass affluent client may not be the same that would attract ultra-high net worth clients.
The most straightforward approach to deploying a digitalization strategy is to ask clients what they want, she said.
Each wealth manager needs a custom digitalization strategy, which could be segmented into onboarding, execution/trade, and dealing with client requests.
One area that wealth managers could stress online is investor education, according to Vashisht. Ultra-high net worth holdings and financial sophistication do not always go hand in hand.
“Year-on-year clients are struggling with basic vocabulary like ‘volatility’ and where risk sits in their portfolios,” she said.
There is no one way to implement a digital strategy, “but as long as you have the internal focus, you are fine,” added fellow presenter Philipp Zerhusen, director of market development at FactSet.
Such programs do not need massive budgets and firms can turn to third-party providers, he added.