How wealth managers can meet and exceed client expectations
- August 5, 2021
- 10 min. read
HNW (High Net Worth) clients today are almost unrecognisable from their predecessors just a decade or so back. First and foremost, profit is no longer the number one priority. Sustainability matters. Around one third of Millennial (aged between 24 and 40) investors mostly or totally exclude non-sustainable investments from their portfolios altogether. And it’s not just the investment appetite that’s changed. It’s the way it’s packaged too.
While investors still want 100% of the personal attention their parents’ and grandparents’ generations received from a relationship manager, they’re not necessarily looking for a human to help them out all the time. A hybrid blend of human and digital is much better suited for this new breed of investors. What’s more, it’s not just for the always-on Millennial millionaire, Gen-Zers, Baby-boomers and beyond are raising their expectations too.
Three industry experts who know more than most about what customers want and how to achieve it, are; Christine Socasau, Digital Wealth Lead & Product Owner for HSBC’s Wealth Compass, Jon Soberg, Managing Partner at MS&AD Ventures and Jason Gordo, Head of Strategic Partnerships and Client Experience at Goldman Sachs Personal Finance. We plugged into their insightful panel at the recent FinTech Global Digital Wealth & CX Forum to find out more (watch the replay here). Here’s our take on the most compelling findings:
It needs to be real time, every time
For challenger bank customers, most payments and transfers can be pinged over in a matter of seconds. The dreary days of not knowing how much is “really” in the account, versus when the balance was last updated are long behind us. With just a few taps, money can be instantly transferred overseas, moved to a different pot or even invested. It’s become ordinary. And, as we all know, HNW investors demand extraordinary service. “Now people are expecting to have their information at their fingertips”, elaborates Soberg. “That really does change the game in terms of what you have to have in technology and service in order to really make people happy”.
Millionaires who find themselves waiting around and getting frustrated with an app will not be impressed. “Clients are equally catching on to the speed and the pace of things for sure”, agrees Socasau.
“Now people are expecting to have their information at their fingertips. That really does change the game in terms of what you have to have in technology and service in order to really make people happy”
They say that patience is a virtue, but for HNW clients today, this clearly does not apply to wealth managers. Research from Signicat reveals 63% of retail banking customers abandoned a financial service in the past twelve months, because it was taking too long. Even more devastatingly, 32% refuse to even start a financial process with their bank because they believe it will be too laborious. Banks have precious little time to fix their reputation of being slow, before their retained clients start to move away.
In some cases, even the instant service isn’t enough. Recent research found that 51% of clients today expect their wealth manager to anticipate their needs and make relevant suggestions before the client has even made contact. This brings us to the next building block of HNW client expectations – real time hyper-personalisation. “Real time personalisation”, explains Gordo. “It’s [the question of] how do we deliver a unique, robust, dynamic experience in a hyper personalised way in real time”.
It’s not just personal, it’s hyper-personal
The phenomenon of hyper-personalisation takes its roots from the incredible quantities of data companies collect about us. “I think people might be amazed to know how much data some of these platforms are able to get”, explains Soberg. “…These platforms often have access to each one of the transactions. So not only do they know about your lifestyle in aggregate, but they might know exactly how much money you’re spending on junk food versus good food and things like that”.
It’s hard to fathom exactly how much data is out there. But to give you an idea, last year it would have taken one person around 181 million years to download all the data from the internet. Today, as more people gain access to internet (currently at 59% of the world’s population), that figure rises even higher.
Combine this superhuman data collection with machine learning and AI, and you have real-time hyper-personalisation. The new online investment platforms today have the sought-after ability to provide extremely personal services at unheard-of speeds. And customers have quickly become accustomed to the benefits. As Gordo explains, wealthy clients are thinking to themselves, “I want to be served the way I want to be served. I want to get the things I want, and in the way that I want them”… and, it seems, in record-breaking time too.
“[W]ealthy clients are thinking to themselves, “I want to be served the way I want to be served. I want to get the things I want, and in the way that I want them”… and, it seems, in record-breaking time too.”
Technology such as machine learning and AI is clearly the answer. Customers want results in super human speed, which could only be achieved with advanced technology. In a recent study, Deloitte identified that legacy tools and patchwork technology make up one of the three major obstacles holding retail banks back from offering hyper-personalisation. (The other two being a focus on selling products rather than solving issues, and a lack of customer trust). The study found that a whopping 94% of financial services firms are not offering hyper-personalisation for this reason. This offers an incredible window of opportunity for forward-thinking wealth managers to race ahead and make excellent hyper-personalisation a core differentiator.
Learn more about how technology can differentiate your client experience
Re-branding the wealth manager
This doesn’t mean that the expert and experienced client advisor is now redundant. Far from it! But they may have to undergo an extreme makeover, to convince this new breed of investors. “Wealth coach seems to be the new term”, explains Socasau, “We need to evolve our terminology”.
Unlike classic advisors, wealth coaches or wealth planners look beyond the investment portfolio, taking a holistic view of the client’s life and expectations. “The planner’s role or the investment counsellor’s role is both an art and a science”, elaborates Gordo. “We want to get to understand who the client is, what do you want your life to look and be like, and not on the surface, but really dig deep into what that means to them”.
For Gordo, the old-school method of scribbling down some calculations and simply re-balancing the portfolio passed – and not before time. “When I got into this business way back 21 years ago”, he reflects. “Clients would ask, ‘Am I okay?’ and the answer would be ‘Well, let me look at your portfolio allocation. Yeah, you’re 60:40 and allocated this way.’ That was the answer to ‘Am I okay,’ which was not the question the client was asking. They want to know, ‘Do I have enough dough to go with this amazing experienced rich life?”
Today, clients are still demanding this same experience-rich life, perhaps even more so than before. A Harris Group study found that over three quarters of Millennials prefer to spend money on a desirable experience or event, over buying something flashy. 69% believe that these events help them become more connected to other people, their community and planet. Surrounded by enviable social media images and surviving global lock-downs will probably only serve to increase this client sentiment.
“The planner’s role or the investment counsellor’s role is both an art and a science. We want to get to understand who the client is, what do you want your life to look and be like, and not on the surface, but really dig deep into what that means to them”
Client advisors today must be more available than ever, to cover all parts of their clients’ life plans and dreams, while scaling up massively to become competitive. “If we’re going to grow profitable businesses”, highlights Gordo, “we have to be able to serve a lot more clients than we’ve served in the past”. And there’s only one way to do this – with technology.
Creating the perfect hybrid solution
Blending digital and human services together means that wealth management can be more than the sum of its parts.
Clients can benefit from real time hyper-personalisation, thanks to technology. And they can also have the personal touch and reassurance needed from an experienced advisor. “Less of the bread and butter is delivered by the human”, Socasau envisions. “That can be delivered by the tools and more of the value-add can be delivered by the person, the advisor”. Streamlining the process to maximum efficiency level means that clients get the service they feel happiest with, at a fraction of the cost.
According to Gordo, clients have key milestone moments when they will seek the advice of an expert, over a robot. “Any time the decision is important, or meaningful in the person’s life, they’re going to want to human involved”, he explains.
Each client is different, and so their milestone moments are unique. However, there are some common conversations where an advisor can add value. For example, over half of wealthy clients want to discuss concerns about their parents’ long-term financial health. 57% want to talk about inheritance and estate planning. And, most frequent of all, 67% of clients want to have a conversation about the long-term finances of their children.
For 68% of emerging wealthy and HNW clients, a hybrid solution is the preferred approach. And for client holding over $10 million in assets, this jumps to a compelling 72%. To offer this, wealth managers will need to wholeheartedly embrace open banking and open finance principles. This means partnering up with specialist and white label technology providers to offer a one-stop-shop of hyper-personal, real time services.
Partner for success
Some years back, heavy-hitting banks and wealth managers acquired promising online financial services providers. Buying up entire teams and products, they hoped to slot them into the existing processes and software in a rough patchwork method. Today, it’s a different approach entirely. Online platforms and traditional banks are partnering up instead. Together, they are bridging the regulatory and customer experience gaps in financial services. Not by squeezing one company into another, but by seamlessly taking the customer from one service to the next, all within the same app or platform. “The best start-ups are thinking more about who [their] customers [are] and what are all the services that they need?”, explains Soberg. “[The fintech] may not provide all of them, but then [they’re] going to partner with three or four others so that [they] can deliver a complete package to somebody that has everything”.
“The best start-ups are thinking more about who [their] customers [are] and what are all the services that they need? [The fintech] may not provide all of them, but then [they’re] going to partner with three or four others so that [they] can deliver a complete package to somebody that has everything”
Partnering up is a clear win-win for wealth managers and the online investment platforms. New entrants gain access to a treasure trove of customer data, as well as the manager’s seal of approval which increases trust. Wealth managers, meanwhile, can become highly efficient, scalable and provide a smooth hybrid one-stop-shop experience for customers… all in hyper-personalised real time.
Right now, Gordo believes banks and wealth managers still have the upper hand when it comes to thrashing out these partnerships deals. “Don’t forget the golden rule”, he advises, “He who has the gold, makes the rule”. The online platforms are popping up left, right and centre. Over the past four years, the number of live challenger banks increased four-fold to 256. And they’re all looking for that golden data and legacy reputation that wealth managers can provide.
Attracting and retaining clients with technology
As wealth management evolves and streamlines, clients will see more benefits across their entire lifecycle. And the race for the top service-providers will narrow. Research from Accenture shows that the 6% of firms already offering hybrid services are storming ahead in terms of brand differentiation. And, what’s more, this model attracts younger, more affluent and a better educated investment base. Which is surely extremely promising for future success.
This panel covered a great many of the core client expectations. The experts stressed the importance of real time access to information, hyper-personalisation, hybrid solutions and how to create a one-stop-shop of seamless services with partnerships. But there are more ways technology can help you to attract and retain clients too. As industry experts in cutting-edge wealth technology, we are always open for a conversation about your next steps and ambitions. In the time it takes to send an email, you could already be on your way to developing a future-proof strategy for your clients and advisors.
Discover our three strategies for attracting new HNW clients
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Wealth Dynamix Team
Wealth Dynamix Team
Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.
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