Four questions wealth managers should ask now

Author: Hermine Ferron-Brandin, Associate Partner, Wealth & Asset Management Consulting, EY Canada

Contributors: Tannor Pilatzke, Manager, Business Strategy & Transformation, EY Canada
Amisha Khatri, Senior Consultant, Business Transformation & Strategy, EY Canada
Caroline Giroux-Huppé, Manager, Innovation & Experience Design, EY Canada
Abdullah Khan, Consultant, Business Strategy & Transformation, EY Canada 

Wealth managers have a better chance of meeting and exceeding customers’ expectations by investing in digital and hybrid experiences.

In brief

• Canadian customers’ preferences are changing, with 40% preferring digital experiences and half leaning toward a hybrid wealth management model.
• To embrace digital or hybrid customer experiences, the advantages of digital should be identified and evaluated throughout the customer journey. 
• Wealth managers should focus on the areas with the most potential for rapidly improving the customer experience.

Changing customer expectations mean Canadian wealth management firms should adopt an increasingly digital and hybrid approach to client service. Seizing this moment to evolve can position firms to go beyond retaining current customers and actually cultivate a more sustainable future overall.

How are Canadian wealth management preferences shifting?

The EY Global Wealth Management Survey shows more than 40% of Canadian customers now prefer digital advisor interactions for financial planning, advice and related activities. That number is up 30% over 2021 findings, revealing a marked shift in the kind of experiences people have come to expect.

In fact, almost half of all Canadian customers prefer a hybrid wealth management engagement model, as opposed to purely digital or advisor-led models. What other trends do we see?

The research shows Canadian wealth management customers are:

• More interested in using digital and virtual tools than in the past
• Increasingly willing to change providers or transfer assets to a new provider in the next three years
• Looking for personalized experiences and recommendations tailored to their specific needs
• Expecting greater transparency and clarity on their portfolio overall

Clearly, this impetus for change is bigger than going digital for digital’s sake. Deploying digital at scale can help wealth management firms reimagine the end-to-end customer journey to deliver against these evolving customer expectations. That helps retain current customers and attract new ones. And that business case extends to talent recruitment and retention as well. How so?

Empowering individual advisors to deliver richer customer experiences and collaborations can now play a part in driving better results. Going increasingly digital also enables advisors to operate more easily, effectively and efficiently. That can be an attractive proposition in a talent market that — although rebalancing — remains highly competitive. 

What’s holding wealth management back from digitizing?

Canadian wealth management advisors haven’t typically been known for digital capabilities. Historically, service providers have lacked the foundational systems that would enable them to share data and transform end-to-end customer experiences. Integrating workflows between different platforms — and managing data within core platforms — has also been a perennial issue. Meanwhile, large organizations often lack the organizational agility needed to connect diverse offerings across brands and other channels through powerfully unified platforms or processes.

From the talent perspective, advisors in Canada continue to prioritize face-to-face interactions where digital features could seamlessly provide the same value — even though the market is demanding something new. All of this is happening in a regulatory environment that’s changing quickly and presenting new compliance requirements year over year.

On the one hand, wealth management firms could see these obstacles as impediments to investing in digital now. On the other, firms that double down on digital could unleash a strategic advantage that sustains the business in these volatile times — and tees the organization up to drive sustainable value over the longer term. Is that an opportunity any firm really wants to pass up?

How can wealth management firms accelerate digital adoption now?

The first step to embracing digital is to get a big-picture understanding of the current gaps, and the greatest possibilities. Customers expect a holistic and connected wealth management journey. Pinpointing and prioritizing investments that can deliver the greatest lift to that digital or hybrid customer experience is a good place to start. Evaluate where digital can offer the greatest benefits, from onboarding through to continuous, value-generating touchpoints. Focus on the drivers with the biggest potential to elevate the customer experience quickly. 

Asking these four questions now can be a great way to start that process:

1. How can we use digital to improve the investing insights we provide? Investment recommendations are part and parcel of good customer service. Being able to drill down into assets by sector or other filters, and compare present performance against a client’s specific investment goals, can take those conversations to a much more personalized level. Digital capabilities can also enable advisors with the ability to provide updated insight that offers customers an understanding of how their performance compares to what’s happening in the market overall. This allows wealth managers to move beyond mail-out summaries that are outdated before they even arrive to a more real-time approach — one that shows greater value and positions advisors as much more strategic partners on the path to meeting financial goals.

2. Can better data aggregation improve wealth planning? Solid financial plans are integrated, bringing together different goals, assets and strategies in a single and accountable program. Customers are increasingly seeking the ability to maintain a full view of their holdings and wealth planning progress. They’re also looking for an aggregated view across providers and asset classes, including less liquid assets like real estate, luxury items, art and more. Digital data aggregation can help deliver that insight. It also allows advisors to get much more targeted in their recommendations and strategies .

3. Could digital tools make everything easier? From the way customers receive, review and sign documents to how they manage reporting and compliance: the right digital platform can streamline efforts. This saves customers and advisors time — while delivering more valuable insight. Digital alerts, apps and more can be useful ways of improving customer experiences and striking the hybrid balance Canadian customers are looking for today.

4. Where could digital capabilities dismantle silos between operations and execution? Across the Canadian market, wealth managers typically separate full-service offerings — where the advisor sets goals, builds a portfolio and manages it for the customer — from more active customer-side trading possibilities. This historic separation means that if a customer is interested in managing a percentage of their own portfolio, they tend to do so in a silo — without a comprehensive or holistic view of how their trade executions align with the advisor’s decisions on the rest of the portfolio. Using digital can show greater customer value by offering a clear line of sight that connects every aspect of wealth management.