Why wealth management needs personalised, frictionless client experiences

The wealth management industry has been experiencing a significant shift over the last five years, propelled by evolving customer expectations and continuing change in the technology landscape. As such, individuals and family offices are becoming ever more demanding and discerning when it comes to what they expect from their engagement with a brand and business.

The value delivered during in-person touchpoints can be seen as being discrete from the other channels with which customers interact with their chosen provider, be it apps, platforms, phone calls, websites or chatbots.

As the customer starts to realise the benefit of consistent, unified, asynchronous omnichannel experiences when interacting with other brands, they start to apply those standards to every business without concern for the intricacies of delivering the same standard of service within highly regulated, risk-on verticals.

The demand for personalised, frictionless and asynchronous digital interactions is stronger with digitally-native younger generations, such as Millennials and Gen Z. And as these cohorts become the later-life wealthy, it is estimated nearly £12 trillion in wealth will transfer from baby boomers to these younger segments. 

To effectively serve this emerging, discerning client base, wealth management firms must understand and adapt to the unique investing behaviours, wealth management requirements and digital expectations of these investors. 

Let’s explore the need and what businesses require to service it!

The technologies enabling personalised, frictionless, asynchronous experiences

At Waracle, we are a bunch of plain-speaking people that deploy our skills in a buzzword-centric world. Saying things like personalisation, frictionless, asynchronous are easy… explaining what they mean is hard. Ultimately, we are talking about platforms and systems which speak to one another to understand the context of the customer’s needs in real-time.

There are a wide range of tools and disciplines that are required to start doing this stuff well. So let’s check out a few of the categories and explain why we think they are important.

• Account Aggregation: By automatically gathering financial data from various accounts held by a client at different institutions, providing a complete overview of their financial situation in one platform, we can eliminate the need for manual data entry and allow for more efficient and holistic experience of the financial planning process. However, while the technology itself is well-established, careful implementation is still required to ensure data accuracy, security and smooth integration across diverse platforms and systems.
• Secure Messaging: In our conversations with wealthy individuals, we have heard over and over again about the complexity of some firms’ communications. Secure messaging platforms enable compliant and convenient communication between clients and advisors. These platforms offer features similar to popular messaging apps but with added security and compliance measures to protect sensitive financial information.
• Digital Sales Rooms: DSRs provide a centralised platform for client collaboration, offering secure access to documents, performance reports and, in some instances, communication tools. This allows clients and advisors to interact and share information in a secure and organised way.
• API and Integrations: APIs enable seamless integration between different platforms and systems, creating a frictionless ecosystem for clients and advisors. These integrations bridge various tools, like investment platforms, trading systems, CRM platforms and financial planning software, allowing them to work in harmony. The maturity of these APIs varies across platforms, with some offering highly robust, well-documented solutions that support real-time data syncing, while others are still evolving. This allows for smooth data exchange and functionality between various tools, such as investment platforms and trading platforms, enhancing efficiency and user experience.
• Client Portals and Mobile Apps: User-friendly portals and mobile apps provide clients with 24/7 access to their financial information, investment tools and communication channels. This empowers clients to manage their finances and access support conveniently at any time.
• Robo-advisors, AI and Machine Learning: Robo-advisors leverage AI and machine learning to offer automated, algorithm-based investment advice, making wealth management more accessible to a wider range of clients. By analysing vast amounts of client data, these platforms can automate tasks like portfolio rebalancing, tax-loss harvesting and enhancing risk management. This integration of AI and ML enables robo-advisors to provide cost-effective solutions that continuously optimise investment strategies, identifying both potential opportunities and risks, all while ensuring that clients receive tailored advice without the need for manual intervention.

So, the buzzword full H2 at the top of this section is actually a bunch of discrete but interoperable toolkits that help your employees do their job, which at the end of the day creates wealth growth for your clients and increases AUM.

Easy, well… not quite.

The change requirements in wealth management firms

It is all very well and good to point out changes in customer behaviour and illustrate the intricacies of modern customer service, it’s another thing entirely to address them in an organisation.

Especially in one that was originally set up as an in-person organisation, that adapted to be a telephony business, that then adapted to become a web based business!

If wealth management companies are to deliver against changing customer expectations, they need scalability, flexibility and data velocity, which isn’t always easy.

But as they say ‘you eat an elephant one bite at a time’… Wealth management organisations need to:

• Prioritise digital transformation: While cloud adoption is growing in wealth management, many firms still stick to on-prem and legacy systems, mainly due to concerns over data security and regulatory compliance. That said, cloud solutions offer major advantages, like access to big data analytics and AI, which cannot be ignored. It’s important for firms to weigh these benefits against potential drawbacks. A thoughtful digital transformation strategy, which may include a hybrid model that combines both on-prem and cloud solutions, will be key to staying competitive and meeting the ever-evolving needs of clients.
• Embrace innovation: Creating a culture that encourages change, allows test and learn and fosters innovative thinking isn’t easy but is incredibly valuable. 
• Build trust and transparency: Maintaining incredibly high ethical standards, ensure data security, privacy and transparency is the cornerstone of brand integrity.
• Focus on Customer Centricity: Develop a deep understanding of customer needs and preferences and tailor their services accordingly. This requires a solid base of both quant and qual to create insights that fuel customer-first decision-making.
• Embolden your efficacy and efficiency: Create automation where possible, facilitation where necessary and free your employee base up from rules-based, repetitive tasks that pull them away from making headway on your North star.

Many wealth management organisations will already be on their way to maturity when it comes to refining their business towards data, information, knowledge and interoperability, but there is always more work to do when optimising to the changing consumer landscape.

The landscape of customer preferences in wealth management

We set a challenge to our team ‘do some desk research to illustrate the change in customer preferences in wealth’. Many studies show that key customer preferences in wealth management are diverging and our team’s initial focus areas are detailed below:

• Personalised Advice: Clients value advisors who understand their individual needs and goals and provide tailored advice. This includes understanding their financial knowledge, communication preferences and emotional factors related to wealth. Notably, 53.8% of clients indicate that an advisor’s personal values influence their decision to do business with them, highlighting the importance of aligning with client values.
• Digital Availability: Clients expect 24/7 access to their financial information and investment tools through online portals and mobile apps. They also want the ability to communicate with their advisors through digital channels, enabling them to manage their finances and get support conveniently.
• Transparency and Trust: Clients value clear communication, transparent fee structures, and advisors who act in their best interests. Building trust is essential for long-term client relationships, and this can be fostered through open communication and demonstrating a commitment to client needs.
• Holistic Offerings: Clients are increasingly looking for holistic advice that goes beyond investment management. This includes financial planning, retirement planning, and even banking and insurance products, reflecting a desire for comprehensive financial guidance. Furthermore, there is a growing demand for advice on saving and planning for future financial goals.
• Advisor Availability: While clients appreciate digital tools, they also want access to human advisors when needed. This includes responsiveness to inquiries and availability for consultations, especially for complex financial matters or when seeking personalised guidance.
• Personalised Digital Experience: Next-generation clients expect a level of personalisation and accessibility in their digital wealth management experience comparable to a “Spotify playlist” for their finances. This means they want personalised, accessible anytime, anywhere and potentially capable of predicting their next investment trend.

So the gauntlet has been laid down. The customer has spoken, they want everything and they want it yesterday. This is the challenge laid at the door of across organisation technology teams.

The future will be digital, personalised, frictionless and asynchronous… or in more plain language, it will be simple, available and easy.

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Conclusion

Our experience across Pensions, Wealth, Asset Management and Investments is only growing, and our vertical knowledge plus our unparalleled people, make us the perfect partner to work on the future of digital customer experiences.

If you have business challenges that are keeping you awake at night, reach out to our team today and discuss them with a good group of empathetic technologists!