Is it really possible to offer personalized experiences to every wealth management client?
It is. And it should be.
The demand for personalization in wealth management has only increased in recent years. Investors do not want a one-size-fits-all response to their financial questions and planning. In the day and age of technology, where AI reveals targeted ads online, suggested purchases on online platforms, customized email settings and the like, individuals expect more out of their wealth management experiences. In fact, they expect the same kind of treatment they’d get anywhere else.
According to a recent poll from Refinitiv, about 64% of millennial investors and 51% of those aged 35 to 54 said they are willing to pay more for individualized investment products and services.
Technology is the answer for wealth management, as much as it is for any other industry seeking to target and serve clients in a more personalized way. Advisors can use technology to automate processes that would otherwise require staff time and attention, thus freeing up the advisors to spend more time on their clients
Additionally, technology can allow investors to take a more active role in their decision making, as has been seen with the rise of tools like direct-indexing. Mobile engagement, which can include access to real-time data, trading tools and tax documents, gives investors access at their fingertips. Already, 46% of investors told Refinitiv that they access account information through a mobile app. That jumps to 72% for millennials.
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The technology goes hand in hand with connections and insights from advisors. The Refinitiv poll found that 47% of millennials say that technology will see financial advisors become more important in the future. And investors reported that “advisor recommendations” are their most trusted sources of information. This was chosen by 58% of advisor-led investors and 62% of hybrid advisor and self-directed clients.
The balance of digital and human to offer personalization doesn’t need to be complicated. Advisors can offer their clients more by using social media to engage and share insights. They can use their websites to offer unique perspectives in the forms of videos, podcasts and blogs. Millennials rank social media as one of the most reliable sources of investment advice (35%), putting it just behind a human advisor (38%).
Phone and video calls, in addition to the occasional in-person meeting, allow for personal connections. The human touch is particularly important in times of uncertainty, as we have seen over the last two years. And, it is how advisors can distinguish themselves from the competition.
By implementing technology, wealth managers can also inspire trust and confidence in their abilities to keep up with the times and offer clients the most cutting edge options. Investors are considering newer products, that they may not be convinced their advisors can confidently offer them. About 32% of millennial investors, for example, told Refinitiv that tokenized assets will have the biggest positive impact on financial markets. Some 23% said the same of non-fungible tokens (NFTs). And 44% of millennials are looking for more information about cryptocurrencies.
Wealth managers have been making an effort to incorporate these personalized aspects into their work more, but there are still significant gaps that need to be filled. These are opportunities for financial advisors to better serve their existing clients, as well as gain new clients seeking better service.