How do investment firms ensure they are more in touch and engaged with their clients? How do they ensure that they have empowered advisors who deliver a superior customer experience at every touchpoint—from prospecting to cementing a long-term relationship with the firm? The answer rests in digitally enabled advisors with integrated organizational systems, which can provide prospects and clients alike a superior experience at every stage of the customer life cycle. In an increasingly complex and evolving business environment of regulatory changes, shifting customer expectations and operational challenges, it is imperative that advisors are optimally equipped with digital tools to seamlessly interface and function between the clients and the firms.
The demand for wealth advisory and management is growing manifold. The continuous growth is driven by an aging demographic, new wealth created in emerging economies, and increasing financial investment options. There are approximately 75 million individuals in the US—comprised of the Baby Boomers, Gen X, and Millennials. Many of these investors represent Generation D, the digital generation. They are educated and digital literates who represent $ 27 trillion in net worth. Of these, 35% are advice-driven, 41% are self-directed, and only 12% have investment knowledge and know-how. Also, they are more comfortable using digital tools. These factors are making wealth management more complex and driving change in the existing service model.
The opportunities in investment and wealth management are obvious, and so is the demand for wealth management services. The global wealth held by High Net Worth Individuals (HNWIs) was expected to grow 6.5% annually to $ 55.8 trillion by 2015. The Asia Pacific region was expected to grow at a Compound Annual Growth Rate (CAGR) of 9.8 %, the Middle East at 6.8%, Europe at 6.2% and North America at 5.7%.
As financial institutions strive for business growth, they face multiple challenges today with an increasingly complex business environment. Competition is intensifying and there is a marked shift to discount brokers and Registered Investment Advisors (RIAs) while regulatory control has increased. An increased churn of investor(s) per advisor has added to the margin pressure that has persisted due to successive global financial crises.
In this volatile environment, wealth management firms need to adopt innovative and disruptive technologies to provide financial advisors with better tools so they can understand, service, and communicate better with their clients. Many firms are leveraging social media, mobile technology, cloud computing, and data analytics. However, they are still searching for effective wealth management business models—ones that can consolidate and add value to the investor-advisor relationships, with a ripple effect on investor and advisor retention, an increase in return on investment (ROI) and business growth.
Full-service wealth management firms are no strangers to digitalizing investment services. They spend huge amounts to establish direct online connections with advisors and clients. These big brokerages, private banks, life insurers, and investment firms .
Spend millions building advisor platforms. Merrill Lynch, for example, is widely reported to have spent $1 billion developing its wealth management workstation, which seamlessly integrates account data, customer records, transaction systems, and planning tools that financial advisors need to run their businesses. Spend millions enabling their clients to self-serve online. These include building, supporting, and maintaining secure client websites, mobile apps, and back-end integration systems. These are smart investments, as 80% of affluent adults in the US visit their investment firms’ websites at least a few times a year. However, these firms barely spend on digitally supporting the advisor-investor relationship. While direct connections between a firm and its advisors/clients are critical, the most valuable relationship at a full service firm is between the client and the advisor, which needs better digital support from the firm.Digital solutions for advisors greatly improve wealth management services by substantially improving the client-advisor relationship. Top of the list of functions that advisors always want on their mobile devices is access to Customer Relationship Management (CRM) systems. They also want broker workstation functions, portfolio management systems, and research systems. These functions are highly important, and digital technologies can effectively embed these functions within client interactions.
The adoption of digital technologies enhances the way services are provided to clients. Although traditional HNWI private banking relationships already deliver a seamless experience, technology can radically re-define and enhance those relationships. Firms that focus on providing a connected experience through digital technologies will enhance client experience, client engagement, and retain profitable client relationships
Digital solutions offer substantial benefits as they assist advisors in carrying client data, regulatory guidelines, product information, market data and news, and portfolio details. There is, however, tremendous value in considering the dynamics of an advisor’s circadian events in designing digital solutions relevant to the wealth industry
Investments in next generation digital technologies allow financial advisors to
These value additions help advisors differentiate themselves and their firms from competitors. Once managing and improving client experiences and . relationships is recognized as a value proposition and key challenge, we can see various client service functions in a different light.
The Digital Storyline: How Digital Enables the Advisor .
Consider Jeff, a wealth advisor targeting Vice Presidents (VPs) at a prominent start-up in Silicon Valley, and Dan, one of the prospects
Wealth advisors, in performing their daily work, can only be about 60% efficient due to the extensive number of applications they use and limited integration between the applications. This has generally been the desktop experience. Also, as clients demand more transparency and information about their holdings, and direction for their investments, advisors need complete and more sophisticated information.
There is widespread perception that the winners in the wealth management space will be those who move from paper to online and mobile channels, from spreadsheet to visualization, from a limited view to 360-degree client relationship data; in other words, firms that can improve each client interaction experience. This will result in enhanced advisor productivity, which in turn will help clients increase the wallet share of assets managed by the firm.
Here we discuss some key ways to implement a digital enablement strategy.
Enhance the advisor-client relationship with digital analytics: As wealth firms integrate their systems for data capture, analytics, automation, and multi-channel presentation, a new class of ’thinking’ digital solutions have emerged. These intelligent solutions collect and analyze data, and provide conclusive and effective recommendations that advisors and clients can easily access.
Help advisors identify, engage, and close more opportunities: Predictive analytics empower decision-makers to visualize and understand what tomorrow presents in the form of opportunities/risks. When developed correctly, analytics deliver real-time insights into customer behavior. Wealth firms can enable advisors to:
Enhance the service experience: Like every other industry today, customer experience is the chief driver in all investment purchase decisions. Understanding all aspects of client servicing thus becomes a key task in better wealth management, including
To improve client service levels, advisors will need to extract insights from client’s preferences and risk tolerance, and connect these with relevant data on markets, news, peers, social and performance. Emerging technologies such as unstructured data analysis, big data, and cognitive computing can help achieve these objectives.
Advisor solutions and client applications with identical or very similar feature sets can be empowering for advisors and clients alike. The
functions that really enhance advisor-client collaborations are:
In a competitive and fast changing regulatory environment, a digitally empowered taskforce can be a significant differentiator. From prospecting, planning face-to-face meetings to post-call follow-ups, and from order processing to post-sales service, digital solutions can be designed to streamline and support every step of your business process.
We have expert knowledge, thousands of person-hours of experience, and a proven track record of efficiently and effectively enabling firms and advisors with digital tools that provide superior customer experience at every touchpoint of the customer lifecycle. We have established ourselves as preferred digitalization partners through:
Choosing the right digital tools and systems is a complex task—one best done in partnership with an experienced IT solutions provider with a masterly grasp of the domain.