Use tech to tackle client wealth personalization challenge, report says

Survey indicates wealth managers who want to compete with tailored services must embrace digital technology

Use tech to tackle client wealth personalization challenge, report says

Wealth managers must personalize services by employing digital technologies, according to a new poll conducted by Refinitiv.

The collated data was compiled by the LSEG Business and market data company, and published in its latest wealth management research titled Getting Personal: How Wealth Firms Can Attract and Retain the Modern Investor.

In the survey of more than 1,500 self-directed and advised investors around the world, including high net worth individuals, 64% of Millennials and 51% of those aged 35 to 54 said they were willing to pay more for individualized investment products and services.

That was most prevalent among respondents from Latin America (70%), followed by Asia-Pacific (47%) and Europe (33%), with North America coming in last (22%).

As noted by news site Wealth Briefing, corporations like UBS are pushing into the mass-affluent arena in the US, where the use of digital technology in robo-advisor platforms and the like is critical for attaining profitable economies of scale, the stakes for effective personalization are high. Across the industry, the hope is that technology will allow businesses to provide personalized care to clients without having to employ a large workforce.

Australia, Brazil, Canada, China, France/Monaco, Germany, Hong Kong, Japan, Mexico, Singapore, Switzerland, the United Kingdom, and the United States were among the 13 countries covered in the report.

“Today’s consumers have grown not only to appreciate, but to expect the ‘know me’ experience from the companies with whom they choose to interact. It’s no surprise they would expect the same level of personalisation when it comes to their investments,” said April Rudin, chief executive of The Rudin Group. “Financial advisors are waking up to this notion and actively evolving their offer, but as this study underscores, there is lots of work – and opportunity – still ahead.”

"Advisor recommendations" are the most trusted source of information for 58% of advisor-led investors and 62% of hybrid advisor and self-directed clients, according to the report's authors.

Looking at other findings, 51% of global investors are accustomed with sustainable investments, and 32% of Millennials believe tokenized assets will have the biggest positive impact on financial markets, followed by non-fungible tokens (NFT) with 23%.

“As investor needs continue to change and reflect new ways of investing and doing business, so too must those of financial advisors to retain clients and grow their business. Our report makes clear what those key investor expectations are and what financial advisors need to do to inspire confidence: provide a broader range of digital capabilities, personalised products and services, and alternative investment opportunities,” Sabrina Bailey, global head of wealth, data and analytics at LSEG, said.