Amid pressure on fees and investor demands for more personalised offerings, wealth managers are realising that it is not good enough to rely on just portfolio performance for client retention and satisfaction, explains Mark Trousdale (pictured), chief growth officer, InvestCloud.
Trousdale’s comments follow on from the Capgemini 2019 World Wealth Report which found that a quarter of high net worth (HNW) participants said a lack of personal advice often led to a low personal connection with their wealth manager.
“If managers want clients to stay for the long-term, they are going to have to hyper-personalise their service. In practice, this means respecting clients’ individuality and making the digital experience warm and personable.”
A more open, transparent and intuitive digital experience will engender more trust, he says. Instead of the usual quarterly statement, end investors will have more information and self-service tools to investigate the portfolio at any time.
But Trousdale highlights that it is as much about data as it is about client experience and that while sometimes it is easier to explain things face-to-face or on calls, with the right tools it is possible to have open, accurate and transparent digital communication with clients too.
“To make this possible, it is important for wealth managers to use a blend of structured and unstructured data for both investments and client information, not in silos but through the use of digital data warehousing. The ability to manage these sets of data as well the notion of atomicity is crucial to delivering hyper-personalised services – without one or the other you do not see the full details about the portfolio and the end investor.”
On top of that, he explains, “investment portals should be designed to be intuitive, involving and individual. This can be done through curated content and portfolio news, using digital engagement tools and personalised financial planning experiences. Ultimately, they should be designed so that clients can work them into their daily routines.”
Investors are likely to have more questions as a consequence, adds Trousdale. “Because of that, wealth managers need to design an investment portal offering which includes digital communication tools such as secure messaging, video chats and even in-your-own-time communication tools where the end investor can record an audio message to their wealth manager and vice-versa. The message can even tag where the investor was looking in the portal at the time.”
For wealth managers looking to offer this type of service to clients, the first step is to understand who they are serving. “It involves a thorough understanding of the digital personas of the clients which requires asking some different questions. For example, how each client is going to react to portfolio events in the absence of a guiding hand.”
He emphasises that all this can be done without the use of artificial intelligence (AI). “Sometimes the idea of AI can put off firms like wealth managers who are not fundamentally tech shops. But wealth managers do not have to wait for AI to develop to make hyper-personalisation happen as it is possible to use intelligent automation, augmented intelligence and analytics, all of which look at how and when clients behave online.
“Investors of all stripes from retail and mass affluent to UHNW increasingly expect a more personal service. While delivering insight and hyper-personalised services is critical, if you can’t trust the information, that is bad for business,” he adds.