What Do Wealth Clients Want from a Digital Proposition?

Greg King 11 August 2021


Here is a sponsored article from FactSet on an important theme within the global wealth management industry.

The following article comes from Greg King, CFA, of FactSet.

The notion that wealthy clients (with more than $2.5 million in investable assets) want a primarily human-led wealth management relationship was under review long before the pandemic. Since the onset of COVID-19, this idea has essentially been rejected as more evidence emerges showcasing a positive relationship between a well-delivered digital proposition and overall client satisfaction.

Most firms understand the importance of delivering a quality experience to clients across their wealth management journey. Research also shows that satisfied clients tend to hold more investable assets with their wealth management firm. A digital mindset is therefore no longer a “nice to have” but a genuine differentiator - and revenue generator for firms. 

Our latest study, in collaboration with Aon, uncovers the specifics behind what makes a digital service stand out, and the impact on financial confidence and attitude to risk taking. It highlights actionable steps wealth management firms can take to make digital propositions more targeted and relevant to wealthy clients and their advisors.

The Digital Divide
Over the last decade, wealth management has been undergoing a protracted digital transformation, unsure to what extent it should let technology play a role in its relationship-driven business model. But the pandemic has shown how closely intertwined the two aspects are.

The quality of the online wealth management experience, particularly during uncertain times, can visibly impact a client’s financial confidence and willingness to ramp up or wind down risk. For example, our study finds that investors who give wealth managers top marks for their digital capabilities, tend to feel more confident about their financial futures than their counterparts (48 per cent vs. 26 per cent).

Technology offers greater control and oversight over investment portfolios. Consequently, it may be the reason why a higher proportion of wealthy clients say they have “adventurous” attitudes to growth of capital strategies, than those whose digital experiences are merely average (12 per cent vs. 5 per cent).

Over a third (35 per cent) of HNW investors give their wealth management firm top scores for its digital capabilities (vs. 18 per cent of mass affluent). Like other segments, they feel one critical advantage of digital wealth management is better use of their time [Figure 1]. To them, a multi-channel experience offers enhanced portfolio management, including greater visibility over performance of their investments and clarity on products and countries to which they’re exposed.

Figure 1: A multi-channel experience offers enhancements 

Q: On balance, what are the clear advantages to conducting more of your wealth management activities online? 
And while many genuinely feel they are receiving a good experience so far, there are some emerging concerns for wealth managers to address. For example, 23 per cent say it is harder to maintain a personal connection with their advisor, while others point to worries over platform security and even identify theft. These concerns are unlikely to abate, so it’s important for firms to find solutions. 

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