New digitization initiatives and changing customer preferences have combined to upend the customer and advisor experience within wealth management. Previously, customer strategy was focused on data points, such as a sleeker, more responsive website or creating more self-service options. However, the focus is now shifting to bridging the gap between the above data points and building an engaging, proactive client-advisor relationship.
Much of this shift is attributed to market disruptions within the industry. Fintech start-ups and an increase in alternative savings vehicles have changed the customer experience on virtually every front—from how wealth is managed and invested to financial guidance. High-growth RIAs have not only recognized changing expectations but embraced them, permanently shifting to provide a faster, easier, and more comprehensive experience.
How Firms Can Respond to Changing Customer Expectations
In the digital age, clients expect to have any time, anywhere access to advisors as well as unrestricted access to a wealth of information. This trend is only expected to accelerate as more digital technologies become available. Furthermore, wealth management firms face the pressures of increasing compliance standards, forcing many firms to reimagine their business processes.
Alongside these factors, data is more important than ever in shaping both processes and the customer experience. Wealth management firms must utilize this data to address market risks and create a fulfilling interaction to stay competitive. However, because most organizations are in the early stages of transforming their digital processes, there is much work to be done. In a report authored by Refinitiv, 46 percent of respondents stated that they were “only partly satisfied or not at all satisfied with their current digital offerings.”
Firms need to bridge this gap and offer a more rewarding client experience by focusing on the following:
- Customization: Gone is the one-size-fits-all approach of the past. Instead, high-growth RIAs are expanding their service offerings to target more specific needs such as income tax preparation, education planning, investment clubs, concierge services, trusts and estates, financing, and more. Ninety percent of wealth management firms that have recently revised their client models for a more tailored, customized approach have already seen success.
- Digitization: In the same report by Refinitiv, 86 percent of respondents rank servicing clients as one of the most important digital capabilities, closely followed by 69 percent who view information access as ‘highly important.’ Some of the top wealth management firms have recognized the importance of digitization and have leveraged the insights and experience from previous solutions to create second-generation solutions.
- Efficiency: Outdated legacy systems and information silos significantly hinder operational efficiency, which, in turn, disrupts the customer experience. In response to this, many firms have turned to automation and building more efficient workflows. However, this is just one aspect of increasing efficiency. Educating both advisors and clients on new processes and tools is needed to ensure a successful efficiency change.
- Data: Data analytics is a huge differentiator for high-revenue firms. Big data companies such as Amazon are experts in using this data to create a holistic, personalized experience for their clients.
- Client relationships: New market disruptions have shifted the focus from products to services with financial planning at the center. Professional development among advisors is increasingly more important among top firms. Clients want to see advisors relying on digital tools and their experience to select the right financial products.
Looking Forward
Market disruptions and rapidly evolving customer trends accurately show the challenges firms face today. Many firms (80 percent according to Refinitiv) have increased spending on ‘change the bank’ initiatives to transform their customer experience. Much of this spending is on solutions that increase customer insight and utilize the latest technology to improve decision making and user engagement.
For firms to thrive in this new environment, a well-defined strategy supported by accurate and holistic data and the right tools is needed. Only then can firms provide a customer experience powered by digitalization and the latest industry trends, accelerating their growth for the foreseeable future.
