Think Digital, Act Human

In the new Digital Age, the word “digital” has almost become redundant. From how we get our news, plan our trips and make purchases, just about everything is digital. It’s become the standard and, for many, the expectation. As a recent study from Ernst and Young (EY) demonstrates, the wealth management industry is no exception. 

 Clients’ Primary Channel Preference

Source: The experience factor: the new growth engine in wealth management

What is striking is the pace at which that expectation is changing. The study, which queried more than 2,000 individual clients ranging from mass affluent to UHNW, shows that, today, a third of these clients prefer to find an advisor through digital means, but in the next two or three years, that number will increase to 46%. Similarly:

1.Preference for opening accounts digitally will grow from 38% to 52%

2.About two-thirds of clients will prefer to learn about and buy products digitally in a few years, up from 58% today

3.And their preference for receiving advice and research digitally will rise to 60%

As you might expect, the trend is especially prevalent among younger clients, who represent the future success of wealth management practices. The study reveals that 43% of UHNW millennials surveyed globally would be “very likely” to consider opening an automated account. They’re also “very likely” to consolidate their assets into fewer firms – 51% of them versus only 9% of UHNW baby boomers.

But, according to the study, while UHNW millennials may have assets, their financial needs may not be sufficiently complex to demand the same range of services – like tax and estate planning and trusts – as those of UHNW boomers. And even if they did, the study points out that they’re concerned that digital advice is “too generic” and firms delivering it have limited track records. This reinforces our belief that established firms capable of delivering a truly personalized experience still occupy a strong position.

The takeaway is to stay current with solutions that meet clients’ digital expectations and thereby make their experience as frictionless as possible. As the EY study observes, “digital capabilities are at the top of wealth management clients’ must-haves.” But at the same time, this digital facility needs to be balanced with the distinctly human value-add of listening, empathizing and understanding the full range of client needs, as well as providing customization at some level, whether it’s by need, type of client or other criteria.