New research reveals profound shifts in investor needs and behaviors that will redefine the wealth industry

NEW YORK, Oct. 1, 2021 /PRNewswire-PRWeb/ — The COVID-19 pandemic has caused dramatic changes in investor attitudes, behaviors, and expectations, overturning conventional wisdom in the wealth management industry about how providers should best serve their clients. To succeed in this new marketplace, wealth and asset management firms will need to revise their thinking about customers and take a more personalized approach to meeting their product and service needs.

The ThoughtLab research, which was carried out in partnership with Deloitte, eToro, FIS, Salesforce, Appway, HCL, LexisNexis Risk Solutions, TCC Group, Recordsure, Refinitiv, and Publicis Sapient, reverses prevailing views about investors:

  • Myth1: Digital is for young, mass market investors. The study shows little difference in digital tastes. The proportion of investors preferring to use a mobile app to engage with their wealth firms is identical for the ultra-rich, baby boomers, and millennials, at 89%.
  • Myth 2: Millennials only want to do things digitally. Another myth. Millennials, like older generations, want personal contact when investing: 46% of millennials prefer face-to-face meetings and 40% prefer phone calls.
  • Myth 3: Older and richer investors care less about ESG. Not so. Only 10% of millennials are planning to invest in green bonds over the next two years, versus 15% of boomers—and 50% of billionaires. Likewise, only 22% of millennials plan to invest in ESG funds, versus 32% of boomers, and 36% of billionaires.
  • Myth 4: Women know less about investing and are more risk-averse than men. Our study shows that 24% of women have a high knowledge of wealth management vs. 16% of men and that percentages of both genders willing to make high- or very high-risk investments are largely the same.

A watershed event for investors

These are some of the insights from ThoughtLab’s just completed study, Wealth and Asset Management 4.0. The comprehensive research program included a worldwide survey of 2,325 investors and 500 wealth and asset management providers. The study revealed that the pandemic was a watershed event that reshaped investor views in many areas:

  • Investments: The pandemic made risk mitigation a top goal for half of investors and prompted about 4 out of 10 investors to include family members in more wealth decisions and to turn their attention to active investing and holistic financial planning.
  • Relationships: About a quarter of investors reported fractured relationships with their advisors due to inadequate personal service. To mitigate risks, 27% of investors distributed accounts to more firms; among billionaires, it was almost twice that number. The trend will continue, with 4 in 10 investors expecting to move money to another firm within the next two years.
  • Digital interaction: The pandemic made digital access a higher priority for 40% of investors and put 30% more at ease working through video and digital tools. In the next two years, three-quarters of investor interactions with advisors will be through digital channels—although face-to-face meetings will also increase.
  • Products and services: More than two-thirds plan to put money in alternative investments over the next two years, and many more will invest in other specialized products such as IPOs, tax-exempt instruments, and ESG funds. Many also plan to seek personalized planning and holistic advice and draw on non-investment services like insurance, tax advice, and loans.
  • Fees: With more time to spend on investing during the pandemic, about a third of investors reevaluated what they pay. Fewer than 4 out of 10 investors are happy with their wealth management firms’ fees and fee structures. Only about a third understand how their advisors are compensated.

“Our study shows that wealth management providers will need to replace their assumptions about age and wealth with a new client lens focusing on personal needs and life stages,” said Lou Celi, the CEO of ThoughtLab and program director. “The smartest firms will not just democratize their products and services, but also their views about investors.”

An eBook with the results from both surveys will be released in November.

For further updates on the program and to access the analysis, please visit https://thoughtlabgroup.com/wealth-management-4/.

For more information, contact:

Lou Celi, Chief Executive Officer ThoughtLab Group louceli@thoughtlabgroup.com

Gina Egan, Marketing Director ThoughtLab Group ginaegan@thoughtlabgroup.com

About ThoughtLab Group

ThoughtLab Group is an innovative thought leadership firm that creates fresh ideas through rigorous research and economic analysis. We specialize in assessing the economic, financial, and social impact of latest technology on cities, companies, industries, and world markets. Our services include fielding business, consumer, investor, and government surveys; organizing executive interviews, meetings, and advisory groups; conducting economic modeling, AI sentiment monitoring, benchmarking, and performance analysis; and developing white papers, eBooks, infographics, and customer-facing analytical tools.

Media Contact

Gina Egan, ThoughtLab, +1 2032463945, ginaegan@thoughtlabgroup.com

SOURCE ThoughtLab