In their report on uses of technology on wealth management EY, the consultancy firm, says that the COVID-19 pandemic has forced wealth clients to accelerate their use of digital technology. It also says that it seems certain that the pandemic will lead to permanent changes in the behaviour of firms and investors.
Nalika Nanayakkara, EY Americas Wealth & Asset Management Consulting Leader, Mark Wightman, EY Asia-Pacific Wealth & Asset Management Consulting Leader, Alex Birkin, EY Global Wealth & Asset Management Consulting Leader, EY EMEIA Wealth & Asset Management Industry Leader and Mike Lee, EY Global Wealth & Asset Management Leader Globally, have found out in their research that 51% of clients plan to make even greater use of digital tools in the future and the figures are higher among millennials (78%) as well as clients in Latin America (74%) and Asia-Pacific (64%).
One in two wealth clients also plan to engage more with their advisor virtually moving forward. Age is a key differentiator here, with millennials twice as keen as baby boomers to receive advice virtually. Growing adoption is even making its mark on advisor-led wealth models. No fewer than 37% of clients who prefer advisor-led relationships plan to use more digital tools in the future.
Covid-19 and the changes on communications with wealth clients
On the upside, the researchers have resolved that digital adoption is pushing up self-service, empowering client decision making and reducing cost-to-serve. But the shift to digital also can have fewer positive consequences if legacy technology prevents firms from delivering their full offering to clients. For example, it’s not uncommon for clients to find that private banks offer less digital interactivity than retail banks or brokers.
“As a result of COVID-19, clients plan to use more digital and virtual tools provided by their wealth manager.”EY Wealth & Asset Management Team
Perhaps more importantly, the growing use of digital tools is having a profound effect on how clients view their wealth relationships. More than one in three clients indicate that their wealth management relationship has become less personal, as a result of technology, and the figure is even higher among millennial clients and those who prefer digital-led or hybrid engagement models. Even the quarter of clients who prefer advisor-led contact described their relationships as less personal.